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ivil Appeal No. 2116 of 1972. From the Judgment and Order dated 1.2.1971 of the Madhya Pradesh High Court at Jabalpur in S.A. 517 of 1969. S.P. Singh for the Appellants. Uday U. Lalit and A.G. Ratnaparkhi for the Respondents. The Order of the Court was delivered by OZA, J. This appeal arises out of the Judgment dated 1.2.1971 of the High Court of Madhya Pradesh in Second Appeal No. 5 17/69, wherein the learned Judge of the High Court dismissed the Second Appeal filed by the present appellant. 146 The present appellant filed a suit for injunction and possession on the basis of a registered sale deed dated 28.4.66 executed by Smt. Yashoda Bai in his favour with respect to immovable property including agricultural lands and houses. The property originally belonged to her husband and after his death she got it as a limited owner and by influx of time and by coming into force of the , she acquired the rights of an absolute owner. On 28.4.63, she adopted respondent Nain Singh as her son and executed a document said to be the Deed of Adoption. This document is not a registered document and the trial court admitted it in evidence in proof of adoption. This document, in addition to recital of the factum of adoption in presence of Panchayat in accordance with the custom of the Community also contained a covenant wherein she had stated that after this deed of adoption her adopted son will be entitled (Hakdar) to the whole property including movable and immova ble and she will have no right to alienate any part of the property after this deed of adoption. The trial court decreed the suit. The first appellate court dismissed the suit setting aside the decree passed by the trial court. The learned judge of the High Court consid ering the impact of section 12 of the Hindu Adoptions and Mainte nance Act rightly held that the adopted son, in view of the proviso (C) to section 12, will only be entitled to property after the death of the adoptive mother but the learned judge felt that the further covenant in the adoption deed deprived her of that right and conferred that right on the adopted son, on this basis the learned judge of the High Court came to the conclusion that the widow after executing this deed of adoption had no right left in the property and therefore a transfer executed by her will not confer any title on the plaintiff. It is on this basis that the High Court main tained the Judgment of the lower appellate court dismissing the suit of the plaintiffappellant. Against this, by Special leave, this appeal has come to this Court. Learned counsel for the appellant contended that the document which is described as a deed of adoption, in sub stance, is in two parts. One recites the facturn of adoption and the second contains the covenant wherein she has relin quished her rights in the property and conferred rights on adopted son. According to the learned Counsel, so far as it refers to adoption, the courts below were right in admitting the document as an evidence of adoption but so far as it refers to a deed of relinquishment or conferment of right on the adopted son, will be hit 147 by section 17(1)(b) read with section 49 of the Indian and, therefore, the High Court was not right in relying on this clause to come to the conclusion that the widow Smt. Yashoda Bai had no right to transfer the property in favour of plaintiff appellant. Section 12 of the reads as follows: "12. Effects of adoption: An adopted child shall be deemed to be the child of his or her adoptive father of mother for all purposes with effect from the date of the adoption and from such date all the ties of the child in the family of his or her birth shall be deemed to be served and replaced by those created by the adoption in the adoptive family: Provided that: (a) the child cannot marry any person whom he or she could not have married if he or she had continued in the family of his or her birth: (b) any property which vested in the adopted child before the adoption shall continue to vest in such person subject to the obliga tions, if any, attaching to the ownership of such property, including the obligation to maintain relatives in the family of his or her birth: (c) the adopted child shall not divest any person of any estate which vested in him or her before the adoption. " Proviso (C) of this Section departs from the Hindu General Law and makes it clear that the adopted child shall not divest any person of any estate which has vested in him on her before the adoption. It is clear that in the present case, Smt. Yashoda Bai who was the limited owner of the property after the death of her husband and after came into force, has become an absolute owner and therefore the property of her husband vested in her and therefore merely by adopting a child she could not be de prived of any of her rights in the property. The adoption would come into play and the adopted child could get the rights for which he is entitled after her 148 death as is clear from the Scheme of section 12 proviso (C). section 13 of the Hindu Adoption and Maintenance Act reads: 13. Right of adoptive parents to dispose of their properties: Subject to any agreement to the contrary, an adoption does not deprive the adoptive father or mother of the power to dispose of his or her property by transfer inter vivos or by will. This Section enacts that when the parties intend to limit the operation of proviso (C) to section 12, it is open to them by an agreement and it appears that what she included in the present deed of adoption was an agreement to the contrary as contemplated in section 13 of the Hindu Additions and Maintenance Act. Section 17(1)(b) of the clearly pro vides that such a document where any right in movable property is either assigned or extinguished will require registration. It could not be disputed that this part of the deed which refers to creation of an immediate right in the adopted son and the divesting of the right of the adoptive mother in the property will squarely fall within the ambit of section 17(1)(b) and therefore under section 49 of the , this could not be admitted if it is not a registered document. Unfortunately, the Hon 'ble Judge of the High Court did not notice this aspect of the matter and felt that what could not be done because of the proviso (c) to section 12 has been specifically provided in the document itself but this part of the document could not be read in evidence as it could not be admitted. In view of this, the appeal is al lowed. The Judgments of the High Court and that of the lower appellate Court are set aside and that of the trial court is restored. In view of these special circumstances, there is no order as to costs. N.P.V. Appeal allowed.

In a suit for injunction and possession of the suit property, on the basis of a registered sale deed executed by the widow of the owner of the property, filed by the appel lants, the question of admissibility of an unregistered document, said to be Deed of Adoption, by which the widow conferred on the adopted son rights in her property and relinquished her right to alienate any part of the property, came up for consideration. The trial court accepted the document only in proof of adoption, and decreed the suit. The first appellate court set aside the decree. On appeal. the High Court maintained lower appellate court 's judgment and held that after execut ing the deed of adoption, the widow had no right left in the property and, therefore, a transfer executed by her would not confer any title on the appellants. Aggrieved, the appellants filed an appeal, by special leave, in this Court contending that as the deed 'would be hit by section 17(1)(b) read with section 49 of the Indian , regarding relinquishment or conferment of right on the adopted son, the High Court was not right in relying on this clause to come to the conclusion that the widow had no right to transfer the property in favour of the appellants. Allowing the appeal, the Court, HELD: 1. Proviso (c) Section 12 of the , departs from the Hindu General Law and 145 makes it clear, that the adopted child shall not divest any person of any estate which has vested in him or her before the adoption. Section 13 enacts that when the parties intend to limit the operation of proviso (c) to Section 12, it is open to them by an agreement to the contrary. [148C] In the instant case, the widow was the limited owner of the property after the death of her husband. But after , came into force, she has become an absolute owner. Therefore, the property of her husband vested in her. Merely by adopting a child, she could not be deprived of any of her rights in the property. The adoption would come into play and the adopted child could get the rights for which he is entitled, after her death. [147G H] 2. Section 17(1)(b) of the clear ly provides that a document, where any right in movable property is either assigned or extinguished, will require registration. [148D] In the instant case, that part of the deed which refers to creation of an immediate right in the adopted son and divesting of the right of the adoptive mother in the proper ty will squarely fail within the ambit of Section 17(1)(b) and, therefore, under Section 49 of the , this could not be admitted if it is not a registered docu ment. [148E]

161 of1958 and 109 of 1959. Petitions under article 32 of the Constitution of India for the enforcement of fundamental rights. Achhru Ram, D. B. Prem and Ganpat Rai, for the petitioners (In Petn. No. 161 of 58 and 16, 17, 35, 58, 69, 102, 109/1959). D.R. Prem, B. Thiagarajan and T. Satyanarayana, for the petitioners (In Petn. No. 36 of 1959). C. K. Daphtary, Solicitor General of India, R. Ganapathy Iyer, R. H. Dhebar and T. M. Sen, for the respondents (in all the petitions). April 28. The Judgment of the Court was delivered by SHAH, J. In the First Schedule to the Constitution, as originally enacted under the heading " Part C States" were set out the names of ten "C" States. The Parliament of India enacted The Government of Part C States Act, 49 of 1951, providing for the constitution of Legislative Assemblies, Councils of Ministers and Councils of Advisers for Part C States. Under section 4 of the Act, the President was authorised to delimit by order the constituencies into which each Part C State was to be divided and the areas of the constituencies, the number of seats allocated to each such constituency and the number of seats reserved for scheduled castes and tribes. In exercise of the powers conferred by section 4 of the Act, the President made an order determining the constituencies into which the State of Himachal Pradesh was to be divided. In 1952, elections were held to the Himachal Pradesh Assembly and 36 members were elected in the different constituencies. In the Legislative Assembly of the State, 757 Bill No. 7 of 1953 was introduced by the Government for the abolition of certain intermediaries in respect of landed estates. Before that Bill was passed into an Act, on May 8, 1954, the Parliament of India enacted the Himachal Pradesh and Bilaspur (New State) Act No. 32 of 1954. This Act which constituted a new State by uniting the States of Himachal Pradesh and Bilaspur received the assent of the President on May 28, 1954, and was brought into force under a notifi cation dated July 1, 1954. Under section 12 of Act 32 of 1954, a Legislative Assembly for the new State of Himachal Pradesh was to be constituted with 41 seats to be filled by direct elections. No fresh elections to the new State Assembly were held, but on July 7, 1954, a notification was issued by the Lieutenant Governor of the new Himachal Pradesh State purporting to exercise the powers conferred by section 9 of the , converting the second session of 1954 of the Himachal Pradesh Legislative Assembly. Pursuant to this notification, the Legislature assembled and Bill No. 7 of 1953 which was introduced in the old Himachal C State Assembly was passed into an Act. This Act called the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1954 hereinafter called the Abolition Act received the assent of the President on Novem ber 23, 1954, and was brought into force under a notification issued by the State Government on January 26, 1955. This court, in petitions under article 32 of the Constitution challenging the constitutional validity of the Abolition Act, held that the said Act could not be recognised as a piece of legislation validly enacted. It was held that even though section 15(1) of the New State Act provided that each of the 36 sitting members representing a constituency of the old Legislative Assembly of Himachal Pradesh was to be deemed to have been elected by that constituency, and by " the deeming provision ", these members were placed in the same position in which they would have been placed had they gone through the entire process of election and been elected, as no notification had been issued under section 74 of the Representation of the People , the 36 members of the old Himachal Pradesh Assembly could not constitute the Legislative Assembly. It was further held that by the notification issued by the Lieutenant Governor, the second session of the old Legislative Assembly was summoned, and not the new Legislative Assembly; and in the session held pursuant to the command of the Lieutenant Governor, Bill No. 7 of 1953 pending before the Assembly of the old State which had lapsed when that Assembly was dissolved could not be enacted as an Act of the Legislative Assembly of the new State. After this decision was pronounced on October 10, 1958, the President issued Ordinance No. 7 of 1958 validating the constitution and proceedings of the Legislative Assembly of the new State of Himachal Pradesh formed under Act 32 of 1954, and prohibiting the courts from questioning the validity of the proceedings of the new Legislative Assembly on the ground of defect in its constitution. This Ordinance was replaced by Act 56 of 1958. Sections 3 and 4 of the said Act provided as under: Section 3: " Notwithstanding anything contained in any law or in any judgment, decree or order of any court, (a)the body of persons summoned to meet from time to time as the Himachal Pradesh Legislative Assembly (Himachal Pradesh Vidhan Sabha) during the period commencing on the 1st day of July, 1954, and ending with the 31st day of October, 1956, by the Lieutenant Governor of Himachal Pradesh in the exercise or purported exercise of the powers conferred on him by section 9 of the , shall be deemed for all purposes to have been the duly constituted Legislative Assembly of the new State of Himachal Pradesh formed under 'section 3 of the ; (b)the persons who sat or voted or otherwise took part in the proceedings of the new Legislative Assembly shall be deemed to have been entitled so to do as members; (c)the persons who functioned as the Speaker and the Deputy Speaker of the new Legislative Assembly 759 shall be deemed to have been duly chosen as the Speaker and the Deputy Speaker respectively; and accordingly (1)any Bill passed by the new Legislative Assembly (whether the Bill was introduced in the new Legislative Assembly or was introduced in the Legislative Assembly of Himachal Pradesh functioning immediately before the 1st day of July, 1954) and assented to by the President shall be deemed to have been validly enacted and to have the force of law; (2) any grant made, resolution passed or adopted, proceeding taken or any other thing done by or before the new Legislative Assembly shall be deemed to have been made, passed, adopted, taken or done in accordance with law. " Section 4: "No court shall question any Act passed, or any grant, resolution, proceeding or thing made, passed, adopted, taken or done by or before the new Legislative Assembly merely on the ground that the new Legislative Assembly had not been duly constituted or on the ground that a person who was not entitled so to do presided over, sat or voted or otherwise took part in the proceedings of the new Legislative Assembly. " By these nine petitions, the constitutional validity of Ordinance No. 7 of 1958 and Act No. 56 of 1958 is challenged and the petitioners pray for writs of mandamus or other writs or directions restraining the Himachal Pradesh Administration and the Union of India from giving effect to Ordinance No. 7 of 1958 and Act No. 56 of 1958 and to the Abolition Act or "acting in any manner under or on the basis of that Act ". Counsel for the petitioners contends, (1) that the persons summoned by the Lieutenant Governor by his notification dated July 7, 1954, could not constitute a Legislature of the new State as those persons were not elected or nominated in the manner prescribed by article 240 of the Constitution; and the Parliament could Dot by law validate acts and proceedings of that body which had no authority to legislate, (2) the Parliament in enacting the Validating 760 Act had no authority retrospectively to form a Legislative Assembly in violation of the terms of article 240 of the Constitution especially when the new State of Himachal Pradesh which was formed under Act 32 of 1954 had ceased to exist at the date when the Abolition Act was enacted, and (3) even if the Validating Act is not open to challenge, the Abolition Act contravened article 31 of the Constitution and is therefore void as infringing the fundamental rights of the petitioners under article 19 and article 31 of the Constitution. In our view, there is no substance in any of the contentions raised. By article 240(1) of the Constitution, before it was amended by the Constitution (Seventh Amendment) Act, 1956, it was provided: " 240. (1) Parliament may by law create or continue for any State specified in Part C of the First Schedule and administered through a Chief Commissioner or Lieutenant Governor (a)a body, whether nominated, elected or partly nominated or elected, to function as a Legislature for the State; or (b)a Council of Advisers or Ministers, or both with such constitution, powers and functions in each case,, as may be specified in the law. " By the Article as it stood before its amendment, the Parliament was competent by law to create or continue for any State specified in Part C of the First Schedule a body to function as a Legislature. Under that Article, the Legislature was to consist of persons nominated or elected, or partly elected and partly nominated, and there is no dispute that the Legislature consisting of members validly elected from the various constituencies functioned for the old State of Himachal Pradesh. Those 36 members of the old Himachal Pradesh Assembly having been under Act 49 of 1951 duly elected to the Assembly of that State, by virtue of section 15(1) of Act 32 of 1954 each member was to be deemed to have been duly elected by the corresponding constituency of the Legislature of the new State, and the only reason why those members could not function as a Legislature of the new State was that the notification under section 74 of the Representation of 761 the People Act was not published. The legislative acts of that Assembly were undoubtedly unauthorised, but it Was competent to the Parliament by legislation to remove the bar which arose because of the failure to issue the notification and to validate the acts done by the Legislature. Article 240 did not provide that the Legislative Assembly could not function unless the members thereof were expressly elected or were nominated to the Legislature of a Part C State. By article 248, the Parliament has the residuary power to make laws with respect to any matter not enumerated in the Concurrent List or the State List, and legislation seeking to remove the disability of members of a Legislative Assembly of a Part C State arising because of the failure to issue a notification under section 74 of the Representation of the People Act, is not covered by any item falling in the Concurrent List or in the State List. By item No. 97 in List I to the Seventh Schedule, the Union Parliament is competent to make any other law not enumerated in Lists II and III. The legislative competence of the Parliament to enact the Act is therefore not open to challenge. The legislative competence of the Legislative Assembly of the New Himachal State Assembly to enact the Abolition Act in 1954 cannot be and is not denied. There is no absolute bar against the authority of the Parliament to enact legislation which takes away vested rights provided the legislation falls within any of the legislative lists within the competence of the Parliament and it does not infringe any of the fundamental rights of the citizens. Again, no constitutional provision is violated by the enactment of Act 56 of 1958. We are also unable to hold that the authority of Parliament to validate the acts and proceedings of the Assembly summoned by the Lieutenant Governor in 1954 was exhausted when article 240 as it originally stood was amended by the Constitution (Seventh Amendment) Act, 1956, and Part C State of Himachal Pradesh ceased to exist. When the Validating Act was enacted, the Himachal Pradesh Part C State had ceased to exist but on that 'account, the authority of the Parliament to validate 762 the proceedings of the body of persons which purported to function as the Legislative, Assembly under Act 32 of 1954 was not extinguished. Did the Abolition Act infringe the fundamental rights of the petitioners under article 19 or article 31 of the Constitution ? By section 1 1, the tenants were invested with the right to acquire the interests of the land.owners in the lands held by them. It was provided that notwithstanding any law, custom or contract to the contrary, any tenant other than a sub tenant shall, on application made to the compensation officer at any time after the commencement of the Act, be entitled to acquire, on payment of compensation, the right, title and interest of the land owner in the land held by him subject to certain terms and conditions set out therein. Section 14 permitted acquisition by the tenants of the rights of the land owners in a portion of the lands of the tenancy in certain specified circumstances. Section 15 sanctioned the acquisition by the State Government of the rights of the land. owners by notification in the gazette declaring that as from such date and in respect of such area as may be specified in the notification, the right, title and interest of the land owner in the lands of any tenancy held under him by a tenant shall stand transferred to and vest in the State Government free from all encumbrances created in such lands by the land owner. By section 16, the method of computation of the compensation payable for acquisition of the right, title and interest of the land owners under section 15 is prescribed. By section 27, it was provided that notwithstanding anything contained in the provisions of the foregoing sections of that chapter, the land owner who held land, the annual land revenue of which exceeded Rs. 125 per year, the right, title and interest of such owner in such land shall be deemed to have been transferred and vested in the State Government free of all encumbrances. Sub section (3) of section 27 laid down that the land owner whose right was acquired under sub section 1 by the State Government shall be entitled to receive compensation to be determined by the compensation officer having regard to so. 17 and 18 of the Act, in accordance with the provisions of Schedule II; but in 763 the case of such occupancy tenant who was liable to pay rent in terms of land revenue or the multiple of land revenue, the compensation payable to his landowner shall be computed in accordance with Schedule 1. Provision was also made by the Act for State management of lands in certain eventualities. Article 31 of the Constitution as amended by the Constitution (Fourth Amendment) Act, 1955, provides, inter alia, that a law for compulsory acquisition of property for public purposes shall not be called in question in any court on the ground that the compensation provided by that law is not adequate, and by article 31 A which was substituted by the Constitution (Fourth Amendment) Act, 1955, for the original Article with retrospective effect, it is provided that notwithstanding anything contained in article 13, no law providing for (a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights. shall be deemed to have become void on the ground that it is inconsistent with or takes away or abridges any of the fundamental rights con ferred by article 14, 19 or 31; provided that where such law is made by the Legislature of a State, the provisions of the Article shall not apply thereto unless the law, having been reserved for the consideration of the President, has received his assent. The Abolition Act passed by the State Assembly was reserved for consideration of the President and it received his assent. The impugned Act contains provisions transferring the interest of the land owners to the tenants in lands and for acquisition by the State of the property of the land owners on payment of compensation under the Schedule provided in that behalf. This court has held in Sri Ram Narain vs State of Bombay (1) that a statute the object of which is to bring about agrarian reform by transferring the interest of the land owners to tenants falls within the class of statutes contemplated by article 31 A(a) and is protected from the attack that it violates the fundamental rights enshrined in articles 14, 19 and 31 of the Constitution. Counsel appearing on behalf of the petitioners conceded, and in our judgment rightly, that the principle of that case governed this (1) [1959] Sapp; 1 S.C.R. 489; 764 case and the validity of section 11 could not in view of article 31 A be challenged. The validity of the provisions for acquisition by the State of the lands of the land owners for compensation determinable in accordance with the provisions of Sch. 11 is also not liable to be challenged under article 31 read with article 31 A. In that view of the case, all these petitions must fail and they are ordered to be dismissed with costs. Petitions dismissed.

On October 10, 1958, the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953, was declared invalid by the Supreme Court on the ground that the Legislative Assembly of the New Himachal Pradesh State which passed it was not duly constituted and was as such incompetent to pass the Act (Vide: Shree Vinod Kumar vs State of Himachal Pradesh, [1959] SUPP. 1 S.C.R. 160). The President by Ordinance NO. 7 of 1958 validated the constitution and proceedings of the said Assembly. That Ordinance was replaced by the Validating Act No. 56 of 1958 passed by the Parliament. Section 3 of the Act validated the constitution and proceedings of the Legislative Assembly of the Himachal Pradesh State and section 4 prohibited the courts from questioning the validity of any Act or proceeding of the Assembly on the ground of defect in its constitution. The Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act was accordingly validated. The petitioners who were land holders challenged the constitutionality of the Ordinance and the validating Act, by petitions under article 32 of the Constitution: Held, that (i) in view of article 24o as it stood before its amendment by the Constitution (Seventh Amendment) Act, 1956, the Parliament was competent to enact the validating Act; (ii) the provisions of the Abolition Act did not infringe articles 19 and 31 Of the Constitution, and (iii)the Abolition Act fell within the protection of article 31A of the Constitution and it was not open to challenge on the ground that it infringed articles 19 and 31 Of the Constitution. Shri Ram Narain vs State of Bombay, [1959] Supp. 1 S.C.R. 489, referred to. The reason which precluded the members of the Old Himachal Pradesh Assembly from functioning as the Legislature of the New Himachal Pradesh State was that a Notification under section 74 of, the Representation of the People Act 1951, Was not 756 issued. The Parliament, by virtue of its residual powers of legislation under article 248 of the Constitution and item No. 97 of List I to the Seventh Schedule, was competent to remove the defect that arose because of the failure to issue the notification, and to validate the actual proceedings of the body which functioned as the Legislature. Under article 240 Of the Constitution, as it stood before it was amended by the Constitution (Seventh Amendment) Act, 1956, the Parliament was not debarred from enacting the validating Act nor did the power of the Parliament to validate the acts and proceedings of the State Legislature come to an end when the State itself ceased to exist.

Appeal No. 246 of 1967. Appeal from the judgment and order dated October 19, 1966 of the Punjab High Court in Civil Writ No. 739 of of 1966. N. C. Chatterjee, section C. Agarwala, R. K. Garg, K.M.K. Nairand L. M. Singhvi, for the appellant. Niren De, Additional Solicitor General, Chetan Das Dewan, Deputy Advocate General for the State of Haryana and N. H. Hingorani, for the respondent. 436 The Judgment of the Court was delivered by Shah, J. The State of Madhya Pradesh held an enquiry against the appellant Dr. ' Bool Chand a member of the Indian Administrative Service on charges of "gross misconduct and indiscipline" in respect of the conduct of the appellant when he was Collector District Rajgarh. The Enquiry Officer held that in recording certain remarks "regarding association of tile Commissioner of Bhopal with one B.L. Gupta a pleader of Zirapur", the appellant was "actuated by malice" and his conduct "offended against official propriety, decorum and discipline", and that the appellant had without permission removed a safe from the Rajgarh Treasury. The President of India served notice upon the ap pellant requiring him to show cause against the order of compulsory retirement proposed to be passed in regard to him. The President also consulted the Union Public Service Commission. The Union Put", Service Commission was of the view that "in the light of the findings and conclusions stated by them and having regard to all the circumstances relevant to the case. the penalty of compulsory retirement on proportionate pension should be imposed upon" the appellant. and they advised the President accordingly. By order dated February 28, 1963. the President directed that the, appellant be compulsorily retired from the Indian Administrative Service with immediate effect. In March 1965 the appellant was appointed Professor and Head of the Department of Political Science in the Punjab Univer sity. On June 18, 1965, the appellant was appointed Vice Chancellor of the Kurukshetra University by order of Mr. Hafiz Mohd Ibrahim who was the Chancellor of the University. After Mr. Hafiz Mohd. Ibrahim vacated the office of Chancellor of the University, Sardar Ujjal Singh, Governor of Punjab. held the office of Chancellor. On March 31, 1966, the Chancellor Sardar Ujjal Singh ordered that the appellant be Suspended from the office of Vice Chancellor, and by another order the Chancellor issued a notice requiring the appellant to show Cause why his services as Vice Chancellor of the Kurukshetra University be not terminated. The appellant submitted his representation, and shortly thereafter filed a petition in the High Court of Punjab for a writ in the nature of mandamus quashing the order and the notice dated March, 31, 1966. On May. 8, 1966 the Chancellor passed an order in exercise of the power under sub cl. (vi) of cl. 4 of Sch. 1 to the Kurukshetra University Act, 1956, read with section 14 of the Punjab General Clauses Act, 1898, terminating with immediate effect "the services" of the appellant "from the office of Vice Chancellor of the Kurukshetra University". The petition was then amended by the appellant. and a writ of certiorari or appropriate writ calling for the record and quashing the order dated May 8. 1966, terminating the services of the appellant was also claimed. The High Court rejected the petition filed by the appellant. Against that 437 order, with certificate granted by the High Court, this appeal has been preferred. The first argument raised on behalf of the appellant is that the Chancellor had no power to terminate the tenure of office of a Vice Chancellor. It is necessary, in considering the validity of that argument, to read certain provisions of the Kurukshetra University Act 12 of 1956. By section 4 the University is invested with the power, inter alia, to do all such things as may be necessary, incidental or conducive to the attainment of all or any of the objects of the University. By section 7. amongst others, the Chancellor, the Vice Chancellor and the Registrar are declared to be officers of the University. By section 8 the powers, duties of officers, terms of office and filling of casual vacancies are to be prescribed by the statutes. Section 14(1) provides that the statutes in Sch. I shall be the statutes of the University and that the "Court of the University shall have the power to make new or additional statutes and to amend or repeal the statutes. By section 21 it is provided that every salaried officer and teacher of the University shall be appointed under a written contract, which shall be lodged with the University. By cl. 4 of Sch. I the Vice Chancellor is declared the principal executive and academic officer of the University, and also the ex officio Chairman of the Executive Council, the Academic Council, and the Finance Committee, and is invested with authority to see that the Act. the Statutes, the Ordinances and the Regulations are faithfully observed, and to take such action as he deems necessary in that behalf. The Vice Chancellor is also authorised to exercise general control over the affairs of the University and to give effect to the decisions of the authorities of the University. Sub clauses (vi) & (vii) of cl. 4 provide: "(vi) The 'Upa Kulapati ' (Vice Chancellor) shall be appointed by the 'Kulapati ' (Chancellor) on terms and conditions to be laid by the 'Kulapati ' (Chancellor). (vii) The 'Upa Kulapati ' (Vice Chancellor) shall hold office ordinarily for a period of three years which term may be renewed. '. '. From a review of these provisions it is clear that the Vice Chancellor is an officer of the University invested with executive powers set out in the Statutes and his appointment is to be made ordinarily for a period of three years and on terms and conditions laid down by the Chancellor. There is no express provision in the Kurukshetra University Act or the Statutes thereunder which deals with the termination of the tenure of office of Vice Chancellor. But on that account we are unable to accept the plea of the appellant that the tenure of office of a Vice Chancellor under the Act cannot be determined before the expiry of the period for which he is appointed. A power to appoint ordinarily implies a power to determine the 438 employment. In section R. Tiwari vs District Boarel, Agra,(1) it was observed by this Court at p. 67: "Power to appoint ordinarily carries with it the power to, determine appointment, and a power to terminate may in the absence of restrictions express or implied be exercised, subject to the conditions prescribed in that behalf, by the authority competent to appoint. " A similar view was also expressed in Lekhraj Sathramdas Lalvani vs N. M. Shah, Deputy Custodian cum Managing Officer, Bombay (2) . That rule is incorporated in section 14 of the Punjab General Clauses Act I of 1898. That section provides: "Where, by any Punjab Act, a power to make any appointment is conferred, then, unless a different intention appears, the authority having for the time being power to make the appointment shall 'also have power to suspend or dismiss any person appointed whether by itself or any other authority by it in exercise of that power." Counsel for the appellant urged that since the general rule is given a statutory form, the validity of the exercise of the power to determine the tenure of the office of the appellant must be found in section 14 of the, Punjab General Clauses Act. Counsel says that section 14 has no application to the interpretation of the Kurukshetra University Act, because cl. 4(vii) of the Statutes which prescribes that the appointment of a Vice Chancellor shall ordinarily be for a period of three years discloses a different intention. But cl. 4(vii) of the Statutes does not purport to confer upon a person appointed Vice Chancellor an indefeasible right to continue in office for three years: the clause merely places a restriction upon the power of the Chancellor, when fixing the tenure of the office of Vice Chancellor. Counsel also urged that under section 14 of the Act power to ap point includes power to dismiss, but not to determine employment. In support of that contention he urged that in relation to the tenure of service of a public servant, the expression "to dismiss" has come to mean to determine employment as a measure of punishment. But section 14 of the General Clauses Act is a general provision: it does not merely deal with the appointment of public servants. It deals with all appointments, and there is no reason to hold, having regard to the context in which the expression occurs, that the authority invested with the power of appointment has the power to determine employment as a penalty, but not otherwise. The expression "dismiss" does not in its etymological sense necessarily involve any such meaning as is urged by counsel (1) ; (2) ; 439 for the appellant. The implication that dismissal of a servant involves determination of employment as a penalty has been a matter of recent development since the Government of India Act, 1935, was enacted. By that Act certain restrictions were imposed upon the power of the authorities to dismiss or remove members of the civil services, from employment. There is no warrant however for assuming that in the General Clauses Act, 1898, the expression "dismiss" which was generally used in connection with the termination of appointments was intended to be used only in the sense of determination of employment as a measure of punishment. The expression "Punjab Act" is defined in section 2(46) of the Punjab General Clauses Act as meaning an Act made by the Lieutenant Governor of the Punjab in Council under the Indian Councils Acts, 1861 to 1909, or any of those Acts, or the Government of India Act, 1915, or by the Local Legislature or the Governor of the Punjab under the Government of India Act, or by the Provincial Legislature or the Governor of the Punjab, or by the Provincial Legislature or the Governor. of East Punjab under the Government of India Act, 1935, or by the Legislature of Punjab Linder the Constitution. By section 14(1) of the Kurukshetra University Act 12 of 1956, it was declared that on the commencement of the Act, the Statutes of the University shall be those as set out in the Schedule 1. The Statutes incorporated in the First Schedule were made by the Legislature and must for the purpose of section 14 of the Punjab General Clauses Act be regarded as "Punjab Act". They do not cease to be "Punjab Act" merely because they are liable to be altered by the University Court in exercise of the power conferred by section 14(2) of the University Act. It was also urged that whereas provision was made by cl. 6 of the Annexure to Ordinance XI that the services of the tea hers may be summarily determined on the ground of misconduct, .here was no such provision for determination of the employment of the Vice Chancellor and that also indicated an intention to the contrary within the meaning of section 14 of the Punjab General Clauses Act. We are unable to agree with that contention. It is true,. the office of the Vice Chancellor of a University is one of great Responsibility and carries with it considerable prestige and authority. But we are unable to hold that a person appointed a Vice Chancellor is entitled to continue in office for the full period of ' his appointment even if it turns out that he is physically decrepit, mentally infirm, or grossly immoral. Absence of a provision setting up procedure for determining the employment of the Vice Chancellor in the Act or the Statutes or Ordinances does not, in our judgment, lead to the inference that the tenure of office of Vice Chancellor is not liable to be determined. The first contention raised by counsel for the appellant must therefore fail. It was then urged by counsel for the appellant that the Chancellor was bound to hold an enquiry against the appellant before 440 determining his tenure, and the enquiry must be held in consonance with the rules of natural justice. The Additional Solicitor General submitted that since the claim for relief by the appellant was founded on an alleged breach of contract, the remedy of the appellant, if any, lay in an action for damages, and not in a petition for a high prerogative writ. The Additional Solicitor General invited our attention to the averments made in the petition filed by the appellant that the Chancellor "was bound by the letter of appointment which created a tenure of office for three years" and which the Chancellor could not unilaterally determine in the purported exercise of an assumed power, and that in any event no such circumstances had been disclosed which would entitle the Chancellor to avoid the contract of service which was binding on the University, and submitted that since it was the appellant 's case that his appointment as Vice Chancellor was purely contractual, and the Chancellor had no power unilaterally to determine the contract, no relief of declaration about the invalidity of the order of the Chancellor may be granted in exercise of the jurisdiction of the High Court to issue high prerogative writs, and the only remedy which the appellant is entitled to claim is compensation for breach of contract, in action in a Civil Court. It is true, as pointed out by the Judicial Committee of the Privy Council in A. Francis vs Municipal Councillors of Kuala Lumpur(1), that when there has been purported termination of a contract of service, a declaration that the contract of service still subsisted would rarely be made and would not be made in the absence of special circumstances, because of the principle that the Courts do not grant specific performance of contracts of service. The same view was expressed in Barber vs Manchester Regional Hospital Board and Anr(2) and in Vidyodaya University of Ceylon and Ors. vs Silva(3). In these cases the authority appointing a servant was acting in exercise of statutory authority but the relation between the person appointed and the employer was contractual, and it was held that the relation between the employer and the person appointed being that of master and servant, termination of relationship will not entitle the servant to a declaration that his employment bad not been validly determined. If the appointment of the Vice Chancellor gave rise to the relation of master and servant governed by the terms of appointment, in the absence of special circumstances, the High Court would relegate a party complaining of wrongful termination Of the contract to a suit for compensation, and would not exercise its jurisdiction to issue a high prerogative writ compelling the University to retain the services of the Vice Chancellor whom the University does not wish to retain in service. But the office of a (1) (2) (3) 441 Vice Chancellor is created by the University Act: and by his appointment the Vice Chancellor is invested with statutory powers and authority under the Act. The petition filed by he appellant in the High Court is a confused document. Thereby the appellant did plead that the relation between him and the University was contractual, but that was not the whole pleading. The appellant also pleaded, with some circumlocution that since he was appointed to the office, of Vice Chancellor which is created by the Statute, the tenure of his appointment could not be determined without giving him an opportunity to explain why his appointment should not be terminated. The University Act, the Statutes and the Ordinances do not lay down the conditions in which the appointment of the Vice Chancellor may be determined, nor does the Act prescribe any limitations upon the exercise of the power of the Chancellor to determine the employment. But once the appointment is made in pursuance of a Statute, though the appointing authority is not precluded from determining the employment, the decision of the appointing authority to terminate the appointment may be based only upon the result of an enquiry held in a manner consistent with the basic concept of justice and fairplay. This Court observed in State of Orissa vs Dr. (Miss) Binapani(1) it p. 1271: "It is one of the fundamental rules of our constitutional set up that every citizen is protected against exercise of arbitrary authority by the State or its officers. Duty to act judicially would, therefore, arise from the every nature of the function intended to be performed, it need not be shown to be super added. If there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power. If the essentials of justice be ignored and an order to the prejudice of a person is made, the order is a nullity. That is a basic concept of the rule of law and importance thereof transcends the significance of a decision in any particular case. " The power to appoint a Vice Chancellor has its source in the University Act: investment of that power carries with it the power to determine the employment; but the power is coupled with duty. The power may not be exercised arbitrarily, it can be only exercised, for good cause, i.e. in the interests of the University and only when it is found after due enquiry held in manner consistent with the rules of natural justice, that the bolder of the office is unfit to continue as Vice Chancellor. In Ridge vs Baldwin and Others(1) a chief constable who was subject to the Police Acts and Regulations was, during the pendency of certain criminal proceedings in which he was arrested (1) ; (2) [1964] A.C. 41. 442 and charged together with other persons, with conspiracy to obstruct the course of justice, was suspended from duty by the borough watch committee. The chief constable was acquitted by the jury on the criminal charges against him and he applied to be reinstated. The watch committee at a meeting decided that the chief constable had been negligent in the discharge of his duties and in purported exercise of the powers conferred on them by section 191(4) of the Act of 1882 dismissed him from office. No specific charge was formulated against him, but the watch committee in arriving at their decision, considered his own statements in evidence and the observations made by the Judge who acquitted him. in support of the order of dismissal. The chief constable appealed to the Home Secretary who held that there was sufficient material on which the watch committee could properly exercise their power of dismissal under section 191(4). The decision of the Home Secretary was made final and binding on the parties by section 2(3) of the, Police Appeals Act, 1927. The chief constable then commenced ' an action for a declaration that the purported termination of his appointment as chief constable was illegal, ultra vires and void,, and for payment of salary. The action was taken in appeal to the House of Lords. The House of Lords (Lord Evershed dissenting) held that the decision of the watch committee to dismiss the chief constable was null and void, and that accordingly notwithstanding that the decision of the Home Secretary was made final and binding on the parties, that decision could not give validity to the decision of the watch committee. Lord Reid observed at p. 65: "So I shall deal first with cases of dismissal. These appear to fall into three classes: dismissal of a servant by his master, dismissal from office held during pleasure, and dismissal from an office where there must be something against a man to warrant his dismissal. The law regarding master and servant is not in doubt. There cannot be specific performance of contract of service, and the master can terminate the contract with his servant at any time and for any reason or for none. But if he does so in a manner not warranted by the contract he must pay damages for breach of contract. So the question in a pure case of master and servant does not at all depend on whether the master has beard the servant in his own defence: it depends on whether the facts emerging at the trial prove breach of contract. Then there are many cases where a man holds an office at pleasure. Apart from judges and others whose tenure of office is governed by statute, all servants and officers of the Crown hold office at pleasure, and this has been held even to apply to a colonial judge (Terrell vs Secretary of State for the Colonies It has always been held, I think rightly, and the reason is clear. As the person having the power of dismissal need 443 .lm15 not have anything against the officer, he need not give any reasons. So I come to the third class, which includes the present case. There I find an unbroken line of authority to the effect that an officer cannot lawfully be dismissed without first telling him what is alleged against him and hearing his defence or explanation. " The case of the appellant falls within the third class mentioned by Lord Reid, and the tenure of his office could not be interrupted without first informing him of what was alleged against him and without giving him an opportunity to make his defence or explanation. The Chancellor Sardar Ujjal Singh did issue a notice upon the appellant requiring him to show cause why the tenure of his service should not be terminated. The appellant made a representation which was considered, and his tenure was determined because in the view of the Chancellor it was not in the public interest to retain the appellant as Vice Chancellor. The appellant was informed of the grounds of the proposed termination of the tenure of his office and an order giving detailed reasons was passed by the Chancellor. But the appellant contended that in arriving at his decision. the Chancellor misread the order of the President and took into consideration evidence which was not disclosed to the appellant, and failed to consider evidence in his favour which was on the, record. It is true that the order of the President only recites that the appellant was compulsorily retired as an officer of the Madhya Pradesh Cadre of the Indian Administrative Service: it does not expressly state that the order of compulsory retirement was imposed as a penalty. But a review of the disciplinary proceedings against the appellant which culminated in the order of the President leaves no room for doubt. The order of compulsory retirement was passed against the appellant as a penal order. There is no substance in the plea that the order of the Chancellor was vitiated, since the Chancellor in ascertaining the true. effect of the order of the President took into consideration a letter from the Secretary (Services), Government of India, Ministry of ' Home Affairs, dated May 6, 1966. The letter which has been set out in the order of the Chancellor merely catalogues the various, steps taken by the different authorities which considered the case of the appellant before the order of compulsory retirement of the appellant from the Indian Administrative Service was passed by the President. That letter contains no new material. The plea that the Chancellor was influenced by evidence which was not disclosed to the appellant is also without substance. 444 It appears that before he passed the order of suspension the Chancellor had received letter from Prof. D.C. Sharma and Dr. A. C. Joshi in answer to enquiries made by him relating to the circumstances in which the appellant was appointed to the post of Professor of Political Science in the University of Punjab, and these letters were not disclosed to the appellant. Counsel for the appellant says that these letters indicate that the University authorities fully knowing that the appellant was compulsorily retired from the Indian Administrative Service, appointed him as Vice Chan cellor. But the appellant did not specifically plead or make out the case that the Chancellor Mr. Hafiz Mohd. Ibrahim was made aware of the order of compulsory retirement. The Chancellor Sardar Ujjal Singh in passing the impugned order considered the grounds set up in the representation and then posed the question whether his predecessor in office, when he made the appointment of the appellant was aware of the fact that the appellant had been compulsorily retired as a measure of punishment from the Indian Administrative Service, and came to the conclusion that there was nothing to show that he Mr. Hafiz Mohd. Ibrahim was aware of the order of compulsory retirement. In paragraph .13 of his order, the Chancellor Sardar Ujjal Singh observed: "At the time of his appointment as Vice Chancellor, the fact of his compulsory retirement was not known to the Chief Minister or the then Chancellor. The alleged knowledge of the fact of compulsory retirement on the part of the Chief Minister, Cabinet or the previous Chancellor is, therefore, without any basis. " Unless he was moved in that behalf by the appellant it was not the duty of the Chancellor Sardar Ujjal Singh, before he passed the order against the appellant determining the tenure of his appointment, to enquire of Mr. Hafiz Mohd. Ibrahim who passed the order of appointment and of the Chief Minister, Punjab, whether they had come to know of the order of the President. In the petition filed before the High Court the petitioner merely averred in ground (iv) (d) that "the order of the Chancellor was vitiated, inter alia, because the Chancellor had without any material come to a conclusion that there was no basis to allege knowledge of the fact of compulsory retirement on the part of the Chief Minister or the Cabinet or the previous Chancellor": he did not set up the case that the Chancellor had information about the order of the President. His principal plea was that he was under no obligation to disclose that he was compulsorily retired from the Indian Administrative Service. In the affidavit filed by Sardar Ujjal Singh, the assertion made in ground (iv) (d) is denied. Affidavits of Mr. Hafiz Mohd. Ibrahim and Mr. Ram Kishan. Chief Minister. Punjab, were also filed before the High Court. and it was averred that neither of them knew at the time when the appointment was made that the appellant bad been compulsorily retired by the President from the Indian Administrative Service. 445 Mr. Hafiz Mohd. Ibrahim further averred that "this information did not also come to his notice so long he remained Chancellor of the Kurukshetra University", and that if the fact of compulsory retirement of the appellant as a penalty had been within his know . ledge, he would not have appointed the appellant as Vice Chancellor. Even after the affidavits by Mr. Hafiz Mohd. Ibrahim and Mr. Ram Kishan were filed, the appellant by his supplementary affidavit which was filed on July 27, 1966, did not contend that, Mr. Hafiz Mohd. Ibrahim or the Chief Minister had information about the determination of his employment in the Indian Administrative Service. His plea was that the members of the syndicate. the members of the senate and the Vice Chancellor of the Punjab University had knowledge about determination of his employment. when lie was appointed Professor of Political Science; and that plea. we agree with the High Court, was wholly irrelevant. It is true that the Chancellor in his order recorded that Mr. Hafiz Mohd. Ibrahim did not know at the time of making the appointment of the appellant to the office of Vice Chancellor that he was compulsorily retired from the Indian Administrative Service. But no inference arises therefrom that Sardar Ujjal Singh before he passed the orders made any enquiries or had access to evidence which was not disclosed to the appellant. We are unable to agree with counsel for the appellant that before a conclusion could be recorded, it was the duty of Sardar Ujjal Singh to ascertain from Mr. Hafiz Mohd. Ibrahim and Mr. Ram Kishan whether they were aware before the appellant was appointed Vice Chancellor of the order passed by the President. The Chancellor, Sardara Ujjal Singh. was, in Our judgment, under no obligation. unless moved by the appellant, to hold such enquiry. It was for the appellant to take up the defence that Mr. Hafiz Mohd. Ibrahim was informed of the order of the President and to take steps to prove that fact. He did not take up that defence, and he cannot no,, seek to make out the case that the order was vitiated because the Chancellor Sardar Ujjal Singh did not make an enquiry which the Chancellor was never asked to make. The reference to the letter of Prof. D. C. Sharma in the order of the Chancellor has no bearing either on the true effect of the order of the President or on the question whether the Chancellor was cognizant of the order passed by the President. The argument that when considering the letter of Prof. D.C. Sharma, the Chancellor should have also considered the letter of Dr. A.C. Joshi requires no serious consideration. The letters of Prof. D. C. Sharma and Dr. A. C. Joshi are. in our judgment. irrelevant in considering whether the Chancellor Mr. Hafiz Mohd. Ibrahim was aware of the order passed by the President. It is impossible to raise an inference that because the order of the President was gazetted and certain members of the syndicate and senate were aware of tile order of the President, knowledge must also be attributed to the Chancellor. 446 The proceeding resulting in the order passed by the Chancel lor does not suffer from any such infirmity as would justify this Court in holding that the rules of natural justice were not complied with. It is unnecessary in the circumstances to consider the argument advanced by the Additional Solicitor General that even if Mr. Hafiz Mohd. Ibrahim was aware of the order passed by the President ordering compulsory retirement of the appellant from the Indian Administrative Service, it was still open to his successor Sardar Ujjal Singh to determine the tenure of office of the appellant as Vice Chancellor, if in his view it appeared, having regard to the antecedents of the appellant, that the appellant was unfit to continue as Vice Chancellor. We agree with the High Court that. the appellant had the fullest opportunity of making his representation and that the enquiry held by the Chancellor was not vitiated because of violation of the rules of natural justice. In the very scheme of our educational set up at the Univer sity level, the post of Vice Chancellor is of very great importance, and if the Chancellor was of the view, after making due enquiry, that a person of the antecedents of the appellant was unfit to continue as Vice Chancellor, it would be impossible, unless the plea that the Chancellor acted maliciously or for a collateral purpose is made out, for the High Court to declare that order ineffective. The plea that the Chancellor acted mala fide was raised, but was not pressed before the High Court. The appeal therefore fails. There will be no order as to costs. R. K. P. section Appeal dismissed.

The appellant was a member of the Indian Administrative Ser vice in the Madhya Pradesh Cadre and was compulsorily retired from the Service for misconduct by an order of the President in February, 1963. In June, 1965 he was appointed Vice Chancellor of the Kurukshetra University, by the then Chancellor of the University. On March 31, 1966 the new Chancellor who Was in office at the time, ordered the suspension of the appellant from the office of Vice Chan cellor and also issued to him a notice to show cause why his services I should not be terminated. The appellant filed a petition in the High Court seeking a writ in the nature of mandamus to quash the Chancellor 's order of suspension. In the meantime the Chancellor passed an order on May 8, 1966, in exercise of the power under Clause 4(vi). of Schedule I to the Kurukshetra University Act, 1956, read with s.14 of the Punjab General Clauses Act, 1898, terminating the services of the appellant with immediate effect. The appellant then amended his petition and sought a writ of certiorari to quash the order of May 8, 1966. The High Court rejected the petition. In appeal to this Court, it was contended on behalf of the appellant, inter alia, (i) that the Chancellor had no power under the Act or the Statutes to terminate the tenure of office of a Vice Chancellor; and (ii) that the Chancellor was bound to hold an enquiry in accordance with the rules of natural justice before determining the appellant 's tenure, but the appellant had not been given a proper opportunity to explain why his services should not be terminated and, furthermore, the Chancellor had taken into consideration evidence which was not disclosed to the appellant. On the other hand, it was contended for the respondent that since the claim for relief by the respondent was founded on an alleged breach of contract, the remedy of the appellant, if any, lay in an action for damages and not in a petition for a high prerogative writ. HELD, dismissing the appeal: (i)The absence of a provision setting up the procedure for determining the employment of the Vice Chancellor in the Act or the Statutes or Ordinances does not lead to the inference that the tenure of office of Vice Chancellor is not liable to be determined. [439H] A power to appoint ordinarily implies a power to determine employment and this rule is incorporated in s.14 of the Punjab General Clauses Act I of 1898. [437H 438A] S.R. Tiwari vs District Board, Agra, ; and Lekhraj Sathramdas Lalvani vs N. M. Shah, Deputy Custodian cum Managing Officer, Bombay; , ; referred to. 435 An intention contrary to the rule was not evidenced either by the fact that under Clause 4(vii) of the Statutes the appointment of a Vice Chancellor is for three years or because there was no express provision covering the determination of service of a Vice Chancellor for misconduct as there was in the case of teachers. Clause 4(vii) of the Statutes does not purport to confer upon a person appointed Vice Chancellor an indefeasible right to continue in office for three years; the clause merely places a restriction upon the power of the Chancellor, when fixing the tenure of the office of Vice Chancellor. It could not be held that a person appointed a Vice Chancellor is entitled to continue in office for the full period of his appointment even if it turns out that he is physically decrepit, mentally infirm, or grossly immoral. [438E F; 439G H] S.14 of the General Clauses Act is a general provision: it does not merely deal with the appointment of public servants. It deals with all appointments, and there is no reason to hold, having regard to the context in which the expression occurs, that the authority invested with the power of appointment has the power to determine employment as a penalty, but not otherwise. [438G H] (ii)The new Chancellor did issue a notice upon the appellant requiring him to show cause why the tenure of his service should not be terminated and the appellant made a representation which was considered; the appellant was informed of the grounds of the proposed termination of the tenure of his service and an order giving detailed reasons was passed by 'the Chancellor. The High Court had rightly held on the facts that the appellant had the fullest opportunity of making his representation and that the inquiry held by the Chancellor was not vitiated because of any violations of the rules of natural justice. [443D; 446C] (iii) The power to appoint a Vice Chancellor has its source in the University Act: investment of that power carries with it the power to determine the employment but that power may not be exercised arbitrarily; it can be only exercised for good cause, i.e. in the interests of the University and only when it is found after due enquiry held in a manner consistent with the rules of natural justice, that the holder of the office is unfit to continue as Vice Chancellor. [441G] A.Francis vs Municipal Councillors of Kuala Lumpur, ; Barber vs Manchester Regional Hospital Board and Anr., ; Vidyodaya University of Ceylon and Ors. vs Silva. ; State of Orissa vs Dr. (Miss) Binapani, ; ; Ridge vs Baldwin and Ors. [1964] A.C. 41; referred to.

iminal Appeal No.413 of 1982. From the JUdgment and Order dated 12.1.1982 of the Madhya Pradesh High Court in Criminal Appeal No. 7 of 1979. U.R. Lalit, Prithvi Raj, S.S. Khanduja, J.P. Dubey, Y.P. Dhingra, B.K. Satija, Uma Nath Singh, section Karnail and S.K. Gambhir for the appearing parties. The Judgment of the Court was delivered by AHMADI, J. This appeal by special leave is preferred by the appellant Khujji @ Surender Tiwari who has been convicted by both the courts below under section 302 IPC for the murder of one Gulab. The facts leading to this appeal, briefly stated, are that on the evening of May 20,1978 the deceased Gulab and his companion PW4 Ramesh Chander hired a Rickshaw to go to the dispensary of Dr. Mukherjee. PW 3 Kishan Lal pulled the Rickshaw and while he was passing 8 through Suji Mohalla near Panchsheel Talkies the appellant and his companions surrounded the Rickshaw and launched an attack on the deceased and his companion. PW 4 was the first to receive an injury by a cycle chain. Sensing trouble both Gulab and PW 4 jumped out of the Rickshaw and ran in differ ent directions. Gulab ran towards Suji Mohalla whereas PW 4 ran towards Panchsheel Talkies. They were chased by the assailants who formed themselves into two groups. PW 4 was fortunate enough to escape with not too serious an injury but his companion Gulab received stab wounds to which he succumbed on the spot. The evidence of PW 12 Dr. Nagpal shows that the deceased had received three injuries, namely, (i) a penetrating stab wound with a second injury on the intercostal space on right side rib of the size of 3 cms x 5cms x Icm, (ii) a piercing stab wound 8cms below the scapu lar bone and 8cms outside the vertibral column of the size of 2.5cms x 1.5cms x 3cms, and (iii) an incised wound on the frontal auxiliary line 2.5cms x 1.Scms x 2cms deep on the left hipocardium region. This witness, who performed the post mortem, deposed that injury No.1 which had injured the heart was sufficient in the ordinary course of nature to cause death. He further stated that all the three injuries were collectively sufficient to cause death in ordinary course of nature. The three articles, namely, the knife, the Chhuri and the Chhura which were attached in the course of investigation were shown to this witness and he stated that the three injuries were possible by the aforesaid articles. It is clear from this evidence that Gulab died a homicidal death. To bring home the guilt against the appellant the prose cution placed reliance on the evidence of three eye witness es, namely, PW 1 Komal Chand (an on looker), PW 3 Kishan Lal (the Rickshaw Puller) and PW 4 Ramesh (the companion of the deceased) besides the find of human blood on the weapon discovered at the instance of the appellant and on the lant which he was wearing at the time of his arrest. The First Information Report, Exh.P 3, was lodged by PW 4 Ramesh immediately after the incident and the same was recorded by the Investigating Officer PW 13 Ramji Singh at about 9.15 p.m. In the said first information report PW 4 gave the details regarding the incident and furnished the names of all the six assailants. Soon after the first infor mation report was lodged the Investigating Officer visited the scene of occurrence and drew up the Panchnama on the basis of which a sketch plan Exh.P 20A was prepared in due course. The appellant and some of his companions could not be traced till May 22, 1978. After they were traced, they were interrogated and on their expressing 9 willingness to discover the weapons used in the commission of the crime, the Investigating Officer summoned two wit nesses, namely, PW 5 Panna Lal and Rajinder to act as Panch witnesses. The prosecution case is that in the presence of these witnesses the appellant and his companions made cer tain confessional statements under section 27 of Evidence Act which led to the discovery of the weapons used in the commission of the crime. According to the prosecution the appellant Khujji discovered a Chhura (knife) from his garage and the same was attached under the Panchnama Exh. Since this weapon had bloodlike stains, it was sent to the Chemical Analyser and Serologist for examination and report. The report indicates that it was stained with human blood but the blood group could not be determined. The other two companions of the appellant, namely, Parsu and Guddu, also discovered a knife, Exh.[P 7, and a Chhura, Exh.P 13, which were attached under Panchnamas Exh] P 6 and P 12, respec tively. As stated earlier the shirt and pant of Khujji were also attached as blood like stains were noticed thereon. Both these articles were sent to the Chemical Analyser and Serologist. So far as the shirt is concerned, since the blood stains were disintegrated it was not possible to determine the origin thereof. But so far as the pant is concerned, the report states that the stains were of human blood but the blood group could not be determined as the result of the test was inconclusive. On the basis of the first information report, the statements of three witnesses recorded in the course of investigation as well as the evidence regarding discovery and the find of human blood on the incriminating articles, the appellant and five others were charge sheeted for the murder of Gulab. The trial court acquitted all except the appellant. Before the trial court PW 4 Ramesh, who had lodged the first information report, tried to disown it. He was declared hostile as he expressed his inability to identify the accused persons as the assail ants of the deceased Gulab. PW 3, the Rickshaw Puller, while narrating the incident expressed a similar inability and he too was treated as hostile and cross examined by the Public Prosecutor. The third eye witness PW 1 Komal chand, however, supported the prosecution case in his examination in chief but in his cross examination he expressed some doubt regard ing the identity of the appellant and Guddu stating that he had seen their backs only. The trial court came to the conclusion that not only was this witness a chance witness but his presence at the scene of occurrence was extremely doubtful as it was difficult to believe that he had come out at that hour to purchase vegetables. Thus the trial court refused to place reliance on the evidence of the three eye witnesses. The trial court, however, came to the conclusion that the appellant was absconding and that he had discovered the weapon 10 which was found to be stained with human blood. It also relied on the factum of find of human blood on the pant worn by the appellant at the time of his arrest. On the basis of this evidence the trial court convicted the appellant under section 302 IPC and sentenced him to life imprisonment. Khujji preferred an appeal against the said conviction. The High Court while ignoring the evidence of PW 3 Kishan Lal and PW 4 Ramesh relied on the evidence of PW 1 Komal Chand and came to the conclusion that his evidence clearly estab lished the presence of the appellant as one of the assail ants notwithstanding his effort in cross examination to wriggle out of his statement in examination inchief in regard to the identity of the appellant. The High Court noticed that the examination in chief of this witness was recorded on November 16, 1976 whereas his cross examination commenced on December 15, 1976 i.e. after a month and in between he seemed to have been won over or had succumbed to threat. This inference was drawn on the basis of PW 3 's statement that he was severely beaten on the night previous to his appearance in court as a witness. The High Court, therefore, took the view that the subsequent attempt of PW 1 Komal Chand to create a doubt regarding the identity of the appellant was of no consequence since there was intrinsic material in his evidence to establish the presence of the appellant amongst the assailants of deceased Gulab. Relying further on the discovery evidence as well as the find of human blood on the weapon found from the garage of the appellant and on his pant which he was wearing at the time of his arrest, the High Court came to the conclusion that his conviction was well founded and dismissed his appeal. It may here be mentioned that the State did not prefer an appeal against the five companions of the appellant who came to be acquitted by the trial court. It is in these circum stances that the appellant has invoked this Court 's jurisdiction under Article 136 of the Constitution. Mr. U.R. Lalit, learned counsel for the appellant, took us through the entire evidence and submitted that the prose cution version regarding the incident, particularly the involvement of the appellant, is highly doubtful since the correctness of the statement made in the first information report purporting to have been lodged by PW 4 Ramesh is itself doubtful because Ramesh himself has dis owned it. Since the prosecution had declared both PW 3 Kishan Lal and PW 4 Ramesh as hostile to the prosecution the trial court was justified in refusing to rely on their evidence. He further submitted that the presence of PW 1 Komal Chand at the place of occurrence at that hour was highly doubtful and this doubt was reinforced by his conduct in not raising a hue and cry or going to the help of the victim. The evidence 11 disclosed that this witness resides at a place almost two furlongs from the scene of occurrence and claims to have seen the incident from a distance of about 22 feet from a point wherefrom the incident could not have been witnessed by him as is evident from the physical condition of the locality described in this sketch Exh.P 20A. He, therefore,/ submitted that the trial court was justified in describing this witness as a chance witness and in doubting his presence at the scene of occurrence at the relevant point of time. According to him the High Court committed an error in placing reliance on the testimony of this witness. He, however, submitted that the trial court was not justi fied in recording the conviction on the mere fact that the appellant could not be found for two days and there was human blood on his weapon and pant attached in the course of investigation. These two circumstances, contended counsel, constituted extremely thin and weak evidence to record a finding of guilt particularly when the trial Court had discarded the evidence of all the three eye witnesses and had doubted the contents of the first information report Exh. Lastly he submitted that the High Court committed an error in brushing aside the statement made by PW 1 Komal Chand in his cross examination which went to show that his evidence regarding identity of the appellant was highly suspect. Merely because there was a time gap between his examination in chief and his cross examination the High Court was not justified in jumping to the conclusion that the accused party had succeeded in winning him over by threat or otherwise. On this line of reasoning Mr. Lalit contended that the High Court ought not to have interfered with the appreciation of his evidence by the trial court. Besides these submissions based on the evidence of the three eyewitnesses and the find of human blood on the weapon and pant of the appellant, Mr. Lalit further submitted that one set of Panch witnesses, PW 5 Pannalal and Rajinder (not examined), had been employed for all the discovery panchna mas as well as the attachment of clothes of the appellant and others which went to show that PW 5 was a stock witness for the prosecution. He, therefore, submitted that no reli ance could be placed on the evidence of PW 5 and consequent ly the find of human blood on the weapon and the pant looses its probative value. In the end he submitted that the con viction of the appellant substantively under section 302 IPC was not well founded for the simple reason that not a single witness had deposed that the fatal injury was caused by the appellant. The evidence of PW 12 Dr. Nagpal shows that the deceased had three injuries and out of them only injury No. 1 was by itself sufficient in the ordinary course of nature to cause death. So far as injuries Nos. 2 and 3 are concerned, the medical evidnce does not show that each one of them separately was sufficient in the ordinary 12 course of nature to cause death. But the medical evidence is to the effect that all the three injuries taken collectively Were SuffiCient in the ordinary course of nature to cause death. In the absence of positive evidence that injury No. 1 was caused by the appellant and none else, his conviction substantively under section 302 cannot be sustained. In that case at best he can be convicted for hurt under Section 324, IPC further submitted that since his companions were acquitted and the State had not preferred any appeal against their acquittal he could not be convicted with the aid of sections 34 or 149 IPC. Mr. Prithvi Singh, the learned counsel for the State, submitted that the trial court was wrong in rejecting the evidence of PWs 3 and 4 merely because they were declared hostile as if their evidence was totally against the prose cution on that account. He submitted that their evidence cannot be treated as effaced from the record merely because the prosecution chose to treat them as hostile on the limit ed question of identity of the assailants. Their evidence as to the occurrence and number of persons involved in the commis sion of the crime can be relied upon along with that of PW 1 as he was neither a chance witness nor was he faking his presence at the scene of occurrence at the material time. His evidence regarding identity of the assailants is equally acceptable and his subsequent statement made in crossexami nation after a time gap of almost one month was rightly brushed aside by the High Court, whatever be the reason for his change of heart. With regard to the criticism regarding the absence of names of witnesses in the Inquest Report, counsel urged that it was not necessary in law to mention the names of the witnesses in the inquest report as the purpose of preparing the inquest report was merely to make a note of the physical condition of the body and the marks of injury there of noticed at that point of time. On the ques tion of value to be attached to the evidence of the Panch witness PW 5, counsel submitted that nothing was alleged against this witness nor had the appellant given any expla nation regarding existence of human blood on the weapon and the pant attached from him in his statement recorded under section 313 of the Code. On the question regarding the offence committed by the appellant, counsel submitted that once it is proved that more than one person had participated in the assault, the appellant could be convicted for the murder of the deceased with the aid of section 34 or 149 IPC. He, therefore, submitted that the appeal is without merit and deserves to be dismissed. We have given our anxious consideration to the submis sions made by the learned counsel for the contesting parties. The fact that 13 an incident of the type alleged by the prosecution occurred on May 20, 1978 at about 8.20 p.m. is not seriously disputed nor is the location of the incident doubted. The evidence of PW 3 Kishan Lal and PW 4 Ramesh came to be rejected by the trial court because they were declared hostile to the prose cution by the learned Public Prosecutor as they refused to identify the appellant and his companions in the dock as the assailants of the deceased. But counsel for the State is right when he submits that the evidence of a witness, de clared hostile, is not wholly effaced from the record and that part of evidence which is otherwise acceptable can be acted upon. It seems to be well settled by the decisions of this Court Bhagwan Singh vs State of Haryana, ; ; Rabinder Kumar Dey vs State of Orissa, ; and Syed lqbal vs State of Karnataka, [1980] 1 SCR 95 that the evidence of a prosecution witness cannot be rejected in toto merely because the prosecution chose to treat him as hostile and crossexamined him. The evidence of such witness es cannot be treated as effaced or washed off the record altogether but the same can be accepted to the extent their version is found to be dependable on a careful scrutiny thereof. In the present case the evidence of the aforesaid two eye witnesses was challenged by the prosecution in cross examination because they refused to name the accused in the dock as the assailants of the deceased. We are in agreement with the submission of the learned counsel for the State that the trial court made no effort to scrutinise the evidence of these two witnesses even in regard to the factum of the incident. On a careful consideration of their evi dence it becomes crystal clear that PW 4 had accompanied the deceased in PW 3 's rickshaw to the place of incident. In the incident that occurred at the location pointed out by the prosecution, PW 4 sustained an injury. His presence in the company of the deceased at the place of occurrence, there fore, cannot be doubted. Immediately after the incident within less than an hour thereof PW 4 went to the police station and lodged the first information report. It is true that the first information report is not substantive evi dence but the fact remains that immediately after the inci dent and before there was any extraneous intervention PW 4 went to the police station and narrated the incident. The first information report is a detailed document and it is not possible to believe that the investigating officer imagined those details and prepared the document Exh. The detailed narration about the incident in the first information report goes to show that the subsequent attempt of PW 4 to dis own the document, while admitting his signa ture thereon, is a shift for reasons best known to PW 4. We are, therefore, not prepared to accept the criticism that the version regarding the incident is the result of some fertile thinking on the part 14 Of the investigating officer. We are satisfied, beyond any manner of doubt, that PW 4 had gone to the police station and had lodged the first information report. To the extent he has been contradicted with the facts stated in the first information report shows that he has tried to resile from his earlier version regarding the incident. So also the presence of PW 3 at the scene of occurrence cannot be doubt ed once the presence of PW 4 is accepted. The trial court did not go so far as to say that both these witnesses were not present at the scene of occurrence or that PW 4 was not injured in the incident but refused to look into their evidence treating their evidence as non est on their ' being declared hostile by the prosecution. We think that the ap proach of the trial court insofar as the evidence of these two witnesses is concerned, is legally unacceptable. The High Court has not endeavoured to assess their evidence since it thought that the conviction of the appellant could be sustained on the evidence of PW 1 Komal Chand. We are satisfied on a close scrutiny of the evidence of the afore said two eyewitnesses, PWs 3 and 4, that the deceased and PW 4 came to the place of occurrence in the rickshaw pulled by PW 3. On reaching the spot where the incident occurred they were surrounded by certain persons who were lying in wait and a murderous assault was launched on them. The first to receive the injury was PW 4. When they gauged the intention of their assailants they jumped out of the rickshaw and both ran in different directions. The appellant first tried to chase PW 4 but later he turned to the deceased as he was informed by one of his companions Gopal that the person he was pursuing was not Gulab. Therefore, from the evidence of these two eye witnesses the fact that the deceased and PW 4 came to the place of occurrence in the rickshaw of PW 3 is established. So also the fact that on their reaching the place of occUrrence they were surrounded by some persons and an assault was launched on them in which PW 4 received an injury and Gulab died is clearly established. The only area where they have not supported the prosecution and have resiled from their earlier statements is regarding the identity of the assailants. We will deal with that part of the evidence a little later but the fact remains that the deceased had received three injuries as narrated by PW 12 Dr. Nagpal, to which he succumbed on the spot. Once these facts are accepted as proved, the only question which really survives for consideration is whether the appellant was an assailant of the deceased. That brings us to the evidence of PW 1 Komal Chand. Komal Chand 's evidence was not accepted by the trial court on the ground that he was not a natural witness and was only a chance witness. PW 1 explained his presence by stating that he had gone to the market to 15 purchase vegetables and while he was returning therefrom on foot with his cycle in hand he heard a commotion and saw the incident from a short distance. Being a resident of Suji Mohalla, the place of occurrence was clearly in the vicinity thereof and, therefore, his presence at the market place could not be considered to be unnatural. It is not unnatural for working people to purchase vegetables at that hour and, therefore, his explanation regarding his presence cannot be ruled out as false. The sketch map prepared by PW 11 Gaiser Prasad shows that he had seen the incident from a short distance of hardly 22 feet although PW 1 says he saw it from the square. Since the incident occurred at a public place with a lamp post nearby, the possibility of his having identified the assailants could not be ruled out. The exami nation i nchief of this witness was recorded on November 16, 1976 when he identified all the assailants by name. He stated that he knew the six accused persons in court and they were the persons who had surrounded the rickshaw and launched an assault on PW 4 and the deceased Gulab. Of them Gopal struck PW 4 with a chain. He also stated that the appellant Khujji and his companions Gudda and Parsu were armed with knives and when Khujji tried to assault PW 4 with a knife, Gopal shouted Khujji that man is not Gulab". There upon Khujji and his companions ran after the Gulab, overtook him and the appellant, Parsu and Gudda assaulted Gulab with their weapons. Gudda struck Gulab from the front on his chest, Parsu stabbed him on the side of the stomach while Ram Kishan and Gopal held him and the appellant attacked him from behind with a knife whereupon Gulab staggered shouting 'save save ' and fell in front of the house of Advocate Chintaman Sahu. Thereafter all the six persons ran away. His cross examination commenced on 15th December, 1978. In his crossexamination he stated that the appellant Khujji and Gudda had their backs towards him and hence he could not see their faces while he could identify the remaining four persons. He stated that he had inferred that the other two persons were the appellant and Gudda. On the basis of this statement Mr.Lalit submitted that the evidence regarding the identity of the appellant is rendered highly doubtful and it would be hazardous to convict the appellant solely on the basis of identification by such a wavering witness. The High Court came to the conclusion and, in our opinion rightly, that during the one month period that elapsed since the recording of his examination in chief something transpired which made him shift his evidence on the question of identi ty to help the appellant. We are satisfied on a reading of his entire evidence that his statement in cross examination on the question of identity of the appellant and his compan ion is a clear attempt to wriggle out of what he had stated earlier in his examination in chief. 16 Since the incident occurred at a public place, it is reason able to infer that the street lights illuminated the place sufficiently to enable this witness to identify the assailants. We have, therefore, no hesitation in concluding that he had ample opportunity to identify the assailants of Gulab, his presence at the scene of occurrence is not unnat ural nor his statement that he had come to purchase vegata bles unacceptable:We do not find any material contradictions in his evidence to doubt his testimony. He is a totally independent witness who had no cause to give false evidence against the appellant and his companions. We are, therefore, not impressed by the reasons which weighed that the trial court for rejecting his evidence. We agree with the High Court that his evidence is acceptable regarding the time, place and manner of the incident as well as the identity of the assailants. It was faintly submitted by counsel for the appellant that the evidence of eye witnesses could not be relied upon as their names did not figure in the inquest report prepared at the earliest point 'of time. We see no force in this submission in view of the clear pronouncement of this Court in Pedda Narain vs State of Andhra Pradesh, [1975] Supp.SCR 84. Referring to section 174 of the Code of Criminal Proce dure this Court observed at page 89 as under: "A perusal of this provision would clearly show that the object of the proceedings under section 174 is merely to ascertain whether a person has died under suspicious circumstances or an unnatural death and if so what is the apparent cause of the death. The question regarding the details as to how the deceased was assaulted or who assaulted him or under what circumstances he was assaulted appears to us to be foreign to the ambit and scope of the proceedings under section 174. In these circumstances, therefore, neither in practice nor in law was it necessary for the police to have mentioned these details in the inquest report". We, respectfully agree and see no merit in this submission made by the counsel for the appellant. After the appellant and his two companions Parsu and Gudda were arrested they were interrogated by the investi gating officer PW 13 Ramji Singh. In the course of interro gation they showed their willingness to point out the weapons of assault. thereupon the investigating officer called two Panchas, one of them being PW 5 Panna Lal. The very same Panch witnesses were panchas to all the three discovery panchnamas as well as panchnamas regard ing the attachment of the clothes worn by the appellant and his companions. It was, therefore, contended by the counsel for the appellant that PW 5 Panna Lal was a stock witnes whom the police had employed to act as a panch witness. Pointing out that it was Tulsi Ram the brother of the de ceased who had chosen him because he was closely associated with the family of the deceased and was intimated with Babulal another brother of the deceased, Mr. Lalit submitted that no reliance can be placed on the evidence of such an highly interested and specially chosen witness. The witness comes from the same locality and his house is situate within 100 yards of the residence of the deceased. He knows the family of the deceased quite well being a neighbour and of the same 'biradari '. It is equally true that he had gone to the hospital on learning about the assault on Gulab and had stayed back with Babulal since the latter was not feeling well. But would it be proper to throw out his evidence on account of his neighbourly relations with the family of the deceased, when nothing has been brought out in crossexamina tion to shake the intrinsic value to be attached to his evidence? Even in the cross examination of the investigating officer nothing has been brought out to infer that the choice of PW 5 as a Panch witness was a deliberate one made with a view to enlisting his support to the prosecution case. The mere fact that he was a witness to all the Panch namas prepared by the investigating officer is by itself not sufficient to discard his evidence. Even in the case of an interested witness, it is settled law that his evidence cannot be overlooked merely on that ground but at the most it must receive strict scrutiny. In the case of PW 5, except being a good neighbour nothing more is shown. On the question of recovery of the weapon as well as the blood stained pant of the appellant there is hardly any effective crose examination. Nor has the appellant offered any explanation in his statement recorded under section 3 13 of the Code. In these circumstances we are not prepared to reject his evi dence on the specious plea of his being an interested witness. In `Himachal Pradesh Administration vs Om Prakash, ' ; this Court observed at page 777 that it could not be laid down as a matter of law and practice that where recoveries have 'been effected from different places on the information furnished by the accused, different sets of persons should be called in to witness them. There was no injunction in law against the same set of witnesses being present at the successive enquiries if nothing could be urged against them. It is, therefore, clear from the deci sion of this Court that merely because the same set of Panch witnesses were used for witnessing all the three discoveries as well as the attachment of the 18 clothes of the appellant and his companions, PW5 's evidence could not be discarded since nothing had surfaced in cross examination to shake his evidence. We are, therefore, satis fied that the evidence of PW5 Pannalal was rightly accepted by both the courts below. We make limited use of this evi dence in the sense that we do not use any part of the evi dence admissible under section 27 Evidence Act, against the appellant. We merely use the factum of find of the incrimi nating weapon from his garage and his inability to explain the presence of human blood thereon as a circumstance against the appellant. The evidence of PW5 further shows that when the appellant was arrested his garments, namely, shirt and pant were attached as blood like stains were noticed thereon. These articles were sent to the Chemical Analyser and Serologist for examination and report. As stated earlier these reports reveal that the blood stains on the pant worn by the appellant were of human origin. The appellant has not offered any plausible explanation for the existence of human blood on his pant. This too is a circum stance against the appellant particularly because no injury was noticed on the person of the appellant. Mr. Lalit, however, argued that since the report of the serologist does not determine the blood group of the stains on the weapon and the pant of the appellant, the mere find of human blood on these two articles is of no consequence, whatsoever. In support of this contention he placed strong reliance on the decisions of this Court in Kansa Behera vs State of Orissa; , and Surinder Singh vs State of Punjab, [1989] Suppl. 2 SCC 21. In the first men tioned case the conviction was sought to be sustained on three circumstances, namely, (i) the appellant and the deceased were last seen together; (ii) a dhoti and a shirt recovered from the possession of the appellant were found to be stained with human blood; and (iii) the appellant had made an extra judicial confession to two witnesses when arrested. There was no dispute in regard to the first cir cumstance and the third circumstance was held not satisfac torily proved. In this backdrop the question for considera tion was whether the first and the second circumstances were sufficient to convict the appellant. This Court, therefore, observed that a few small bloodstains could be of the appel lant himself and in the absence of evidence regarding blood group it cannot conclusively connect the bloodstanis with the blood of the deceased. In these circumstances this Court refused to draw any inference of guilt on the basis of the said circumstance since it was not 'conclusive ' evidence. This Court, however, did not go so far as to say that such a circumstance does not even provide a link in the chain of circumstances on which the prosecution can place reliance. In the second case also this 19 Court did not consider the evidence regarding the find of human blood on the knife sufficient to convict the appellant in the absence of determination of blood group since the evidence of PW 2 was found to be uninspiring and there was no other circumstance to connect him with the crime. In this case we have the direct testimony of PW 1 Komal Chand, besides the testimony of PWs 3 and 4 which we have consid ered earlier. The find of hunam blood on the weapon and the pant of the appellant lends coroboration to the testimony of PW 1 Komal Chand when he states that he had seen the appel lant inflicting a knife blow on the deceased. The appellant has not explained the presence of human blood on these two articles. We are, therefore, of the opinion that the afore said two decisions turned on the peculiar facts of each case and they do not lay down a general proposition that in the absence of determination of blood group the find of human blood on the weapon or garment of the accused is of no consequence. We, therefore, see no substance in this conten tion urged by Mr. Lalit. That brings us to the last contention whether the con viction of the appellant for the substantive offence of murder can be sustained in the absence of a finding that the fatal injury No. 1 was caused by the appellant. We must at once acceptt the fact that it is not possible from the ocular evidence to record a definte of fact that the appel lant had caused that fatal injury. On the contrary the evi dence of PW 1 Komal Chand indicates that in all probability the stab wound inflicted by the appellant resulted in injury No. 2. that injury by itself was not sufficient in the oridinary course of nature to cause death. If that be so, can the appellant be convicted under section 302, IPC? Counsel for the appellant submits that the legal position is well settled by a chain of decisions of this Court that if named accused are acquitted except one of the them, the latter cannot be convicted with the aid of section 34 or 149, IPC. In support of this contention he invited our attention to a few decisions, namely, Baikuntha Nath Chaud hury vs The State of Orissa, ; Kasturi Lal vs The State of Haryana, ; Chandubhai Sha nabhai Parmar vs State of Gujarat, and Sukh Ram vs State of M.P., [1989] Suppl.1 SCC 214. Counsel for the state, however, submitted that while it may be correct that the appellant cannot be substantively convicted under section 302, IPC, he can certainly be convicted with the aid of section 34 or 149, IPC, if this Court on a reap preciation of the evidence comes to the conclusion that more than one person, may be six or seven of them, had launched an attack on the deceased. In this connection he submitted that notwithstanding the acquittal of others by the Trial Court this Court can reach its own conclusion regarding the number of 20 persons who attacked the deceased for the obvious reason that the higher Court is not bound by the appreciation of evidence by the Trial Court or even the High Court. In support of this contention he placed strong reliance on this Court 's recent decision in Brathi vs State of Punjab, [199 1] 1 SCC 519. Counsel for the appellant on the other hand contended that the acquittal of the co accused creates a legal bar against the conviction of the appellant on the ground that they were privy to the crime notwithstanding their acquittal and this legal bar cannot be got over by reappreciation of evidence. In support of this contention he invited our attention to a Five Judge Bench decision in Krishna Govind Patil V. State of Maharashtra, ; and contended 'that the said decision was binding on us being of a larger bench and the decision in Brathi 's case must be taken to be per incuriam since it had failed to notice and runs counter to the said larger bench decision. We are of the opinion, for reasons which we will immediately state, that the contention urged by counsel for the appel lant is not well founded. The ratio of the decision of this Court in Brathi 's case may be noticed at the outset to appreciate the contention urged by counsel for the appellant. In that case, the appel lant and his uncle were tried under section 302/34, IPC. The Trial Court acquitted the appellant 's uncle but convicted the appellant under section 302, IPC. The order of acquittal became final because the State did not choose to challenge it in appeal. The appellant, however, preferred an appeal against his conviction to the High Court. The `High Court on a reappreciation of the evidence held that the fatal blow was given by the appellant 's uncle and since the appellant was charged under section 302/34, IPC, he could not be convicted substantively under section 302, IPC. However, for assessing the credibility of the prosecution case, the High Court incidentally considered the involvement of the appel lant 's uncle and held that the eye witnesses had given a truthful account of the occurrence and the appellant 's uncle had actually participated in the commission of the crime along with the appellant. In other words, the High Court came to the conclusion that the acquittal of the appellant 's uncle was erroneous but since there was no appeal preferred by the State it could not interfere with that order of acquittal. It, however, came to the conclusion that the crime was committed by the appellant and his uncle in fur therance of their common intention and accordingly main tained the conviction of the appellant under section 302, IPC, with the aid of section 34, IPC. Before this Court the appellant contended that on the acquittal of his uncle the sharing of common intention disappeared and the High Court was not justified in invoking 21 section 34 for maintaining the conviction against him under section 302, IPC. This Court while dealing with this submis sion held that in the matter of appreciation of evidence the powers of the Appellate Court are as wide as that of the Trial Court and the High Court was, therefore, entitled in law to review the entire evidence and to arrive at its own conclusion about the facts and circumstances emerging there from. To put it differently, this Court came to the conclu sion that the High Court was not bound by the appreciation of the evidence made by the Trial Court and it was free to reach its own conclusions as to the proof or otherwise of the circumstances relied upon by the prosecution on a review of the evidence of the prosecution witnesses. This Court, therefore, held that when several persons are alleged to have committed an offence in furtherance of their common intention and all except one are acquitted, it is open to the Appellate Court under Sub section (1)(b) of section 386 of the code to find out on a reappraisal of the evidence who were the persons involved in the commission of the crime and although it could not interfere with the order of acquittal in the absence of a State appeal it was entitled to deter mine the actual offence committed by the convicted person. Where on the reappreciation of the evidence the Appellate Court comes to the conclusion that the appellant and the acquitted accused were both involved in the commission of the crime, the Appellate Court can record a conviction with the the aid of section 34 notwithstanding the acquittal of the co accused the appellate Court cannot reverse the order of acquittal in the absence of a State appeal, it cannot at the same time be hedged by the appreciation of the evidence by the lower court if that appreciation of evidence is found to be erroneous. This Court, therefore, pointed out that in such a fact situation it is open to the Appellate Court to record a finding of guilt with the aid of section 34 not withstanding the acquittal of the co accused since the English doctrine of repugnancy on the face of record has no application in this country as we are governed by our own statutory law. On this ratio this Court confirmed the con viction of the appellant under section 302, IPC, but with the aid of section 34, IPC. The fact situation before us is more or less similar. Several decisions were cited in support of the contention that where two named persons are charged for the com mission of an offence with the aid of section 34, IPC and one of them is acquitted the other cannot be convicted with the aid of section 34, IPC. Dealing with these decisions this Court observed in Brathi 's case that all the decisions relied on were distinguishable on the ground that in none of them the Appellate Court was shown to have disagreed with the Trial Court 's appreciation of evidence but on the con trary the Appellate 22 Court had proceeded on the footing that the appreciation of evidence by the Trial Court was correct. We think that the cases on which Mr. Lalit has placed reliance can also be distinguished on the same ground. In Baikuntha Nath Chaudhury 's case the evidence of two eye witnesses PWs 9 and 10 was to the effect that accused Nos. 1 and 2 had killed their brother with the active par ticipation of accused No. 3, their mother. According to the prosecution accused No. 2, the appellant, had called the deceased tohis house and while he was there accused No. 1 inflicted two lathi blows which proved fatal. The dead body was then put m a gunny bag supplied by accused No. 3 and drowned into a nearby tank. The three accused persons were charged under sections 302/34, and 201, IPC. The Trial Court acquitted accused No. 3 but found the other two guilty. On appeal the High Court acquitted accused No. 1 rejecting the prosecution evidence in regard to his involvement but con firmed the conviction of accused No. 2 under section 302/34, IPC, though the fatal injuries were inflicted by the acquit ted accused No. 1. It will thus be noticed that on a reap preciation of evidence by the High Court accused No. 1 came to be acquitted although he was stated to have given the fatal lathi blows while his brother, the appellant, was convicted on the same evidence. This Court, therefore, concluded that if the evidence of the two eye witnesses were to be accepted, accused No. 1 could not be acquitted since according to them it was he who had given the fatal blows while the appellant had merely caught hold of him. This Court, therefore, observed in paragraph 12 of the judgment that if the occurrence spoken to by PWs 9 and lois accepted, the appellant will be constructively liable for his involve ment, though the fatal injuries were inflicted by his brother. In that case his brother will also be guilty of the said offence. But since the High Court had acquitted the first accused it meant that the High Court did not accept the evidence of PWs 9 and 10 in regard to the incident. This Court did not come to the conclusion that the High Court 's appreciation of evidence in regard a accused No.1 was not proper. In fact it did not examine the case from that point of view but held that since the High Court had not accepted the evidence of PWs 9 and 10 in regard to the part played by the acquitted accused, the appellant could not have been convicted on of the same appreciation of evidence. This becomes clear on a close reading of paragraphs 12 and 13 of the judgment. Similarly in the case of Kasturi Lal this Court came to the conclusion that the reasons given by the High Court for distinguishing the case of Kasturi Lal from that of Khazan Singh and Gurdial Singh were not correct and, therefore ', it was not justified in convicting Kasturi Lal. So, when the case of 23 Kasturi Lal was not distinguishable from that of the above two, this Court felt that the High Court erred in con victing Kasturi Lal. It will thus be seen that this Court came to the conclusion that the reasons Which weighed with the High Court for the distinction drawn were not correct and hence the conviction of Kasturi Lal 'had to be set aside This decision also does not help the appellant. In Chandub hai 's case the prosecution relied on the testimony of PWs 1, 5 and 6 'Both the courts below found their testimony to be unreliable in several particulars and acquired the co accused of the appellant in two stages. This Court concluded that the appellant 's case could not be distinguished from that of his two acquitted companions insofar as the reli ability of the ocular evidence of three eye witnesses was concerned. It was in the said circumstances that this Court thought that the conviction of the appellant under section 302/34, IPC was not justified, particularly, after the evidence of the three witnesses was found to be unreliable. this also, therefore, is not a case where the Appellate Court disagreed with the appreciation of the evidence by the Trial Court and came to a different conclusion regarding the participation of others in the commission of the crime. In Sukh Ram 's case to which one of us (Ahmadi.J.) was a party, this Court interferred with the conviction of the appellant recorded with the aid of section 34 by the High Court because on the facts found proved on evidence the conviction of the appellant could not be sustained on the acquittal of the co accused on the same set of established facts. This Court on its own did not come to the conclusion that the acquittal of Gokul was not well founded as High Court 's appreciation of evidence was not correct. Had it come to that conclusion it could have recorded a conviction of the appellant under section 302/34, IPC, notwithstanding the acquittal of Gokul. Therefore, all the aforesaid cases are clearly distinguishable from the facts of Brathi 's case where the High Court had clearly departed from the apprecia tion of the evidence by the Trial Court and had reached own conclusion in regard to the proof of various facts and circumstances relied on by the prosecution. We are, there fore in respectful agreement with the distinction drawn by this Court on the ground that in none of the cases cited on behalf of the appellant it was shown that the Appellate Court had disagreed with the appreciation of evidence by the Trial Court and the conclusion of facts and circumstances recorded by it. Does the decision in Krishna Govind Patii (supra) take a different view? It is true that the attention of the Bench which disposed of Brathi 's case was not invited to this decision. But, in our opinion, this decision does not take a view inconsistent with the ratio laid down in 24 Brathi 's case. The facts reveal that Krishna Govind Patil and three others were put up for trial for the murder of one Vishwanath. They were charged under section 302/34, IPC and were also separately charged under section 302, IPC. Accused Nos. 1, 3 and 4 pleaded an alibi while accused No. 2 raised the plea of private defence. The Trial Court acquitted all the accused on the ground that the prosecution witnesses were not speaking the truth and the version of accused No. 2 was a probable one. The State appealed against the order of acquittal under section 302/34, but not against the acquit tal under section 302, IPC. The High Court confirmed the acquittal of accused Nos. 1, 3 and 4 on the ground that the evidence regarding their participation in the commission of the crime was doubtful but convicted accused No. 2 on the ground that one or more of them might have participated in the commission of the offence. Accused No. 2, therefore, preferred an appeal to this Court and contended that when three of the four named persons were acquitted the High Court was not justified in convicting him on the basis of constructive liability. This Court held that before a Court can convict a person under section 302/34, IPC, it must record a definite finding that the said person had prior consultation with one or more other persons, named or un named, for committing the offence. When three of the accused came to be acquitted on the ground that the evidence was not acceptable or on the ground that they were entitled to benefit of doubt, in law it meant that they did not partici pate in the offence. It was further held that the effect of the acquittal of the three co accused is that they did not co jointly and with the appellant commit the murder. These observations have to be read in the context of the facts stated above. The High Court on an appreciation of the evidence, came to a definite conclusion that accused Nos. 1, 3 and 4 had not participated in the commission of the crime. On that appreciation of the evidence the High Court could not have come to the conclusion that any of those acquitted accused was privy to the crime even for the limited purpose of convicting the appellant with the aid of section 34. This again is not a case where the Appellate Court disagreed with the appreciation of evidence and reached a conclusion dif ferent from the conclusion recorded by the Trial Court in regard to the participation of the other co accused. This decision is also distinguishable on the same ground as this Court distinguished the other decisions in Brathi 's case. We are, therefore, of the opinion that the omission to refer to this decision does not render the decision in Brathi 's case per incuriam. We are, therefore, in respectful agreement with the law explained in Brathi 's case. Coming now to the facts of this case the Trial Court acquit ted the 25 co accused but convicted the appellant under section 302, IPC. The High Court has confirmed that conviction. Mr. Lalit is right when he says that the prosecution evidence does not disclose that the fatal blow which caused injury No. 1 was given by the appellant. Inherent of this submission is the assumption that the fatal blow was given by someone else. That establishes the fact that more that one person partici pated in the commission of the crime. We have also on an independent appreciation of the evidence of the three eye witnesses, namely, PW 1 Komal Chand, PW 3 Kishan Lal and PW 4 Ramesh, come to the conclusion that several persons had participated in the commission of the crime. The failure on the part of the prosecution witnesses PWs 3 and 4 to identi fy the others does not alter the situation. We are, on the other hand, convinced from the evidence of PW 1 Komal Chand that some of the co accused, particularly, Gunda, Parsu and Gopal had participated in the commission of the crime. It is another matter that in the absence of a State appeal the High Court could not, nor can we, interfere with their acquittal, but as rightly 'pointed in Brathi 's case this Court is not bound by the facts found proved on the appreci ation of evidence by the courts below and is, in law, enti tled to reach its own conclusion different from the one recorded by the court 's below on a review of the evidence. In that view of the matter we think that the conviction of the appellant can be sustained with the aid of section 34 or 149, IPC, as the case may be. In the present case we feel it safe to confirm the conviction of the appellant with the aid of section 34, IPC. We, therefore, cannot agree with the submission of the learned counsel for the appellant that at best the conviction can be recorded under section 324, IPC. We confirm the conviction of the appellant under section 302, IPC, with the aid of section 34 and maintain the sen tence awarded to him. For the above reasons we see no merit in this appeal and dismiss the same. N.P.V. Appeal dismissed.

The appellant was convicted by the courts below under Section 302 IPC and sentenced to life imprisonment for the murder of one G. It was alleged that when the deceased and his companion, PW 4 were proceeding in a rickshaw, pulled by PW 3, the appellant and his five companions launched an attack on them. While PW 4 received an injury by a cycle chain, the deceased received stab injuries, to which the succumbed on the spot. On the First Information Report lodged by PW 4, statements of three eye witnesses viz. PW I, an on looker and PWs 3 and 4 recorded during the course of investigation, and the evidence regarding discovery of incriminating articles and find of human blood on them, the appellant and his five companions were chargesheeted for the murder of the deceased. 2 During the trial, two of the eye witnesses, viz. PWs 3 and 4 were declared hostile, since they expressed their inability to identify the accused persons as assailants of the deceased. Though PW 1 supported the prosecution in examination in chief, he expressed some doubt regarding the identity of the appellant and one other assailant in the cross examination. The trial court refused to place reliance on the evidence of the three eye witnesses and acquitted all, except the appellant. It convicted the appellant under Section 302 IPC and sentenced him to life imprisonment on the evidence that the appellant was absconding, that he had discovered the weapon which was found to be stained with human blood and the factum of find of human blood on the pant worn by him at the time of his arrest The appellant 's appeal was dismissed by the High Court. While ignoring the evidence of PWs 3 and 4, the High Court relied on the evi dence of PW 1 holding that his subsequent attempt to create a doubt regarding the identity of the appellant was of no consequence, since there was intrinsic material in his evidence to establish the presence of the appellant amongst the assailants of deceased. It also relied on the discovery evidence and find of human blood on the weapon and on the pant he was wearing at the time of his arrest. The State did not prefer an appeal against the five companions of the appellant who were acquitted by the trial court. In the appeal before this Court on behalf of the appel lant it was contended that (1) the prosecution version regarding the incident, particularly, the involvement of the appellant was highly doubtful since the correctness of the First Information Report, purported to have been lodged by PW4 was itself doubtful since he had disowned it; (2) the presence of PW1 at the scene of offence and at the time of occurrence was highly doubtful and the High Court committed an error in placing reliance on his testimony in examina tion in chief, while brushing aside his statement in cross examination; (3) same set of Panch witnesses had been em ployed for all the discovery panchnamas as well as the attachment of clothes of the appellant and others and since PW5, Panch witness was closely associated with the family and was a stock witness for the prosecution, no reliance could be placed on the evidence of such a highly interested and chosen witness and consequently find of human blood on the weapon and the pant lost its probative value; (4) the two circumstances, viz. that the appellant was not found for two days, and human blood was present on the weapon and his pant constituted extremely thin and weak evidence to record a finding of guilt, particularly, when the trial court had discarded all the eye witnesses ' evidence and doubted the contents of the FIR, and when the Serologist did not deter mine the blood group of the stains on the weapon and pant of the 3 appellant; (5) in the absence of positive evidence that the fatal injury ' No. I was caused by the appellant only, his conviction substantively under Section 302 IPC could not be sustained; (6) since appellant 's companion were acquitted, and the State had not preferred any appeal against their acquittal, he could not be convicted with the aid of Section 34 or 149 IPC, since the acquittal of the co accused created a legal bar against his conviction, which could not be got over by reappreciation of evidence; and (7) the eye witness es ' evidence could not be relied upon as their names did not figure in the inquest report prepared at the earliest time. On behalf of the State it was contended that (1) evi dence of PWs 3 and 4 could not be treated as effaced from the record, merely because the prosecution chose to treat them as hostile on the limited question of identity of assailants;(2) PW I was neither a chance witness nor was he faking his presence at the scene of occurrence at the mate rial time; (3) it was not necessary in law to mention names of witnesses in the inquest report as the purpose of prepar ing the report was merely to make a note of the physical condition of the body and the marks of injury thereon no ticed at that point of time; (4) nothing was alleged against PW 5. Panch witness, nor the appellant had given any expla nation regarding existence of human blood on the weapon and his pant in his statement recorded under section 313 of the Cr. P.C.; (5) even if the appellant could not be substan tively convicted under Section 302 II 'C, he could still be convicted with the aid of Section 34 or 149 II 'C, if the Court came to the conclusion that more than one person launched the attack and notwithstanding the acquittal of others by the trial court, this Court could reach its own conclusion as the higher court was not bound by the appreci ation of evidence by the trial court or even the High Court. Dismissing the appeal, this Court, HELD: 1.1 The evidence of a prosecution witness cannot be rejected in toto merely because the prosecution chose to treat him as hostile and cross examined him. The evidence of such witnesses cannot be treated as effaced or washed off the record altogether, but the same can be accepted to the extent their version is found to be dependable on a careful scrutiny thereof. [13C] Bhagwan Singh vs State of Haryana, ; Rabinder Kumar Dey vs State of Orissa, ; and Syed lqbal v.state of Karnataka, [1980] 1 S.C.R. 95, relied on. 4 SUPREME COURT REPORTS [1991] 3 S.C.R. 1.2 In the instant case the evidence of two eye witness es PW 3 and 4 challenged by the prosecution in cross exami nation because they refused to name the accused in the dock as the assailants of the deceased. The trial court made no effort to scrutinise the evidence of these two witnesses even in regard to the factum of the incident. It refused to look into their evidence treating it as non est, on their being declared hostile by the prosecution. This approach of the trial court is legally unacceptable. The High Court has not endeavoured to assess their evidence since it thought that the conviction of the appellant could be sustained on the evidence of PW 1. From the evidence of these two wit nesses the fact that the deceased and PW 4 came to the place of occurrence in the rickshaw of PW 3 is established. So also the fact that on their reaching the place of occur rence, they were surrounded by some persons and an assault was launched on them in which PW 4 received an injury and the deceased died is also established. The only area they have not supported the prosecution and resiled from their earlier statements is regarding the identity of the assail ants but the fact remains that the deceased had received three injuries as narrated by PW 12, who conducted the post mortem, and succumbed to the injuries on the spot. Similarly, there is no doubt at all that PW 4 had gone to the police station and had lodged the First Information Report. The detailed narration about the incident in the First Information Report goes to show that the subsequent attempt of PW 4 to disown the document, while admitting his signature, thereon, is a shift for reasons best known to him. Once the presence of PW 4 is accepted, the presence of PW 3 at the scene of occurrence cannot be doubted. [13D, 14C, D F, B] 2. The Trial Court has not accepted PW I 's evidence on the ground that he was not a natural witness, and was only a chance witness. However, on a reading of the entire evidence of PW I it is clear that his statement in cross examination on the question of identity of the appellant and one of his companions is a clear attempt to wriggle out of what he had stated earlier in his examination in chief. Since the inci dent occurred at a public place, it is reasonable to infer that the street light illuminated the place sufficiently to enable this witness to identify the assailants. During the one month period that elapsed since the recording of exami nation in chief, something transpired which made him shift his evidence on the question of identity to help the appel lant. In the circumstance there is no doubt that PW I had ample opportunity to identify the assailants of the de ceased, his presence at the scene of occurrence is not unnatural nor is his statement that he had come to purchase vegetables unacceptable. There are no contradiction in his evidence to doubt his testimony. He is a totally independent wit 5 ness, who had no cause to give false evidence against the appellant and his companions. Therefore, his evidence is acceptable regarding the time, place and manner of the incident as well as the identity of the assailants. [14H 16C] 3.1 The evidence of eye witnesses could not be rejected on the ground that their names did not figure in the inquest report prepared at the earliest point of time. [16D] 3.2 A perusal of Section 174 of the Criminal Procedure Code would clearly show that the object of the proceedings under this Section is merely to ascertain whether a person has died under suspicious circumstances or an unnatural death and if so what is the apparent cause of the death. The question regarding the details as tO how the deceased was assaulted or who assaulteld him or under what circumstances he was assaulted is foreign to the ambit and scope of the proceedings under the section. In these circumstances, neither in practice nor in law, was it necessary for the police to have mentioned these details in the inquest re port. [16E F] Pedda Narain vs State of Andhra Pradesh, [1975] Supp. S.C.R. 84 relied on. 4.1 There was no injunction in law against the same set of witnesses being present at the successive enquiries if nothing could be urged against them. Even in the case of an interested party, his evidence cannot be overlooked on that ground. [17G. E] Himachal Pradesh Administration vs Omprakash, ; , relied on. 4.2 In the instant case, merely because the same set of Panch witnesses were used for Witnessing all the three discoveries as well as the attachment of the clothes of the appellant and his companions, PW 5 's evidence could not be discarded since nothing had surfaced in crossexamination to shake his evidence. Besides, except being a good neighbour nothing more is shown against him. As regards recovery of weapon, as well as the appellant 's blood stained pant, there is hardly any effective cross examination, nor has the appellant offered any explanation in his statement recorded under Section 313 of the Criminal Procedure Code. Hence PW 5 's evidence cannot be rejected on the specious plea of being an interested witness. In the circumstances, hi, evidence was rightly accepted by both the courts below. [17 A, C D, F, 18 A] 6 5.1 The factum of find of the incriminating weapon from the appellant 's garage, and his inability to explain the presence of human blood thereon is a circumstance against him. Similarly, the existence of human blood on the pant that he was wearing at the time of his arrest, for which no explanation was offered by him, is also a circumstance against him, particularly because no injury was noticed on him. [18B D] 5.2 There is also direct testimony of PW I, besides that of PWs 3 and 4. The find of human blood on the weapon and the pant, with no explanation for the same lends corrobora tion to the testimony of PW 1. When he states that he saw the appellant inflicting a knife blow on the deceased. In the circumstances, it cannot be accepted that in the absence of determination of blood group, the find of human blood is of no consequence. [19B C] Kansa Behera vs State of Orissa, ; and Surinder Singh vs State of Punjab, [1989] Suppl. 2 S.C.C. 21, distinguished. 6.1 No doubt it is not possible from the ocular evi dence to record a definite finding of fact that the appel lant had caused the fatal injury. On the contrary the evi dence of PW 1 indicates that in all probability the stab wound inflicted by the appellant resulted in injury No. 2, which by itself was not sufficient in the ordinary course of nature to cause death. I Since the prosecution evidence does not disclose that the fatal blow, which caused injury No. 1 was given by the appellant, it means that the fatal blow was given by someone else, and this establishes the fact that more than one person participated in the commission of the crime. On an independent examination appreciation of the evidence of the three eye witnesses, viz. PWs 1, 3 and 4 that several persons had participated in the commission of the crime. The failure on the part of PWs 3 and 4 to identi fy the others does not alter the situation. On the other hand, from the evidence of PW 1, it is clear that some of the accused participated in the commission of the crime. [19E, 25A C] 6.2 No doubt in the absence of a State appeal, the High Court could not, nor can this Court interfere with the acquittal of the co accused, but this Court is not bound by the facts found proved on the appreciation of evidence by the courts below, and is, in law, entitled to reach its own conclusion different from the one recorded by the courts below on a review of the evidence. The acquittal of the accused does not create a legal bar against the conviction of the appellant with the aid of Section 34 or 149 IPC. [21C F] 7 Brathi vs State of Punjab, ; , affirmed. Baikuntha Nath Chaudhury vs The State of Orissa, ; Kasturi Lal vs State of Haryana, ; Chandubhai Shanabhai Parmdr vs State of Gujarat, ; Sukh Ram vs State of M.P., [1989] Suppl. 1 SCC 214 and Krishna Govind Patil vs State of Maha rashtra; , , distinguished. 6.3 In the circumstances, the conviction of the ap pellant can be sustained with the aid of Section 34 or 149 as the case may be and it is safe to confirm the appellant 's conviction with the aid of section 34 I.P.C. [25D] The conviction of the appellant is accordingly con firmed and sentence awarded to him is maintained. [25E] 7. The omission to refer to the decision of larger Bench rendered Krishna Govind Patil 's case does not render the decision in Brathi 's case per incuriam. In any event that decision does not take a view inconsistent with the ratio laid down in Brathi 's case. [24G] Sukh Ram vs State of M.P., [1989] suppl. 1 SCC 214 and Brathi vs State of Punjab; , referred to.

Appeal No. 150 of 1955. Appeal from the judgment and decree dated August 20, 1952, of the Punjab High Court in Regular First Appeal No. 107 of 1949 arising out of the judgment 140 1100 and decree dated March 22, 1948, of the Court of the sub Judge 1st Class, Panipat, in Suit No. 361 of 1947. Dr. J. N. Banerjee and K. L. Mehta, for the appellant. Gopal Singh, for respondents Nos. 1 to 9. May 23. The Judgment of the Court was delivered by GAJENDRAGADKAR J. If a Hindu governed by the customary law prevailing in the Punjab succeeds to his maternal grandfather 's estate, is the property in his hands ancestral property qua his own sons? This is the short and interesting question of law which arises in this appeal. The appellant is the son of Sarup, respondent 10. On the death of his mother Musammat Rajo, respondent 10 inherited the suit properties from his maternal grandfather Moti. On March 22, 1927, he executed a registered mortgage deed in respect of the said properties in favour of Shibba the ancestor of respondents I to 9 for Rs. 5,000. Subsequently, on April 12, 1929, he sold the equity of redemption to the said mortgagee Shibba for Rs. 11,000. In Suit No. 145 of 1946 filed by the appellant in the court of the Sub Judge, Panipat, from which the present appeal arises, the appellant had claimed a declaration that the two transactions of mortgage and sale in question did not bind his own reversionary rights, because the impugned transactions were without consideration and were not supported by any legal necessity. 'His allegation was that his family was governed by the custom prevailing in the Punjab and, under this custom, the property in suit was ancestral property and he was entitled to challenge its alienation by his father respondent 10. Respondents 1 to 9 disputed the appellant 's right to bring the present suit and urged that the alienations by respondent 10 were for consideration and for legal necessity. It was, however, common ground that respondent 10 and the appellant were governed by the custom prevailing in the Punjab. The learned trial judge held that the property in dispute was ancestral qua the appellant 1101 and that the impugned alienations were not effected for consideration or for legal necessity. He, however, held that the appellant was not born at the time when the mortgage deed in question was executed and so he was not entitled to challenge it. In the result the appellant was given a declaration that the sale in dispute did not bind the appellant 's reversionary rights in the property after the death of respondent 10. The appellant 's claim in regard to the mortgage was dismissed. Respondents 1 to 9 went in appeal against this decree to the District Judge at Karnal and contended that the suit had abated in the trial court as a result of the death of one of the defendants pending the decision of the learned trial judge. The learned District Judge rejected this contention but he set aside the decree and remanded the suit for proceedings for substituting the legal representatives of the deceased defendant Ram Kala. After remand the legal representatives of the deceased Ram Kala were brought on record and ultimately the original decree passed by the trial court ",as confirmed by the learned trial judge. Respondents I to 9 again challenged this decree by preferring an appeal to the District Judge at Karnal. The learned District Judge held that the value of the subject matter of the suit was more than Rs. 5,000 and so he ordered that the memorandum of appeal should be returned to respondents I to 9 to enable them to file an appeal before the High Court. That is how respondents I to 9 took their appeal to the High Court of Punjab. The High Court took the view that the appeal had in fact been properly filed the District Court; but even so it did not ask respondents 1 to 9 to go back to the District Court, but condoned the delay made by the said respondents in the presentation of the appeal before itself and proceeded to deal with the appeal on the merits. The High Court held that the property inherited by respondent 10 was 'not ancestral property qua the appellant, and so it allowed the appeal preferred by respondents 1 to 9 and dismissed the appellant 's suit. In view of the fact that the point of law raised before the High Court was not free from doubt the High 1102 Court ordered that parties should bear their own costs throughout. The appellant then applied for and obtained a certificate from the High Court under the first part of section 110 of the Code of Civil Procedure. It is with this certificate that the present appeal has come before this Court and the only point which has been raised for our decision is whether the property in suit can be held to be ancestral property between the appellant and respondent 10. Under the Hindu law, it is now clear that the only property that can be called ancestral property is property inherited by a person from his father, father 's father or father 's father 's father. It is true that in Raja Chelikani Venkayyamma Garu vs Raja Chelikani Venkataraman ayyamma (1) the Privy Council had held that under Mitakshara law the two sons of a Hindu person 's only daughter succeed on their mother 's death to his estate jointly with benefit of survivorship as being joint ancestral estate. This decision had given rise to a conflict of judicial opinion in the High Courts of this country. But in Muhammad Husain Khan vs Babu Kishva Nandan Sahai (2) this conflict was set at rest when the Privy Council held that under Hindu law a son does not acquire by birth an interest jointly with his father in the estate which the latter inherits from his maternal grandfather. The original text of the Mitakshara was considered and it was observed that the ancestral estate in which, under the Hindu law, a son acquires jointly with his father an interest by birth, must be confined to the property descending to the father from his male ancestor in the male line. Sir Shadi Lal, who delivered the judgment of the Board, explained the earlier decision of the Privy Council in Raja Chelikani Venkayyamma Garu 's case (1) and observed that in the said case " it was unnecessary to express any opinion upon the abstract question whether the property which the daughter 's son inherits from his maternal grandfather is ancestral property in the technical sense that his son acquires therein by birth an interest jointly with him." The learned Judge further clarified the position by stating that the (1) (19O2) L.R. 29 I.A. 156. (2) (1937) L.R. 64 I.A. 250. 1103 phrase 'ancestral property ' used in the said judgment was used in the ordinary meaning, viz., property which devolves upon a person from his ancestor and not in the restricted sense of the Hindu law which imports the idea of the acquisition of interest on birth by a son jointly with his father. Thus there is no doubt that under the Hindu law property inherited by a person from his maternal grandfather is not ancestral property qua his sons. The question which arises in the present appeal is: what is the true position in regard to such a property under the Customary law prevailing in the Punjab ? This question has been considered by Full Benches of the High Court of Punjab on three occasions. Let us first consider these decisions. In Lehna vs Musammat Thakri (1), it was held by the Full Bench (Roe section J. and Rivaz J., Chatterji J. dissenting) that " in the village community where a daughter succeeds, either in preference to, or in default of, heirs male, to property which, if the descent had been through a son, would be ancestral property, she simply acts as a conduit to pass on the property as ancestral property to her sons and their descendants and does not alter the character of the property simply because she happens to be a female ". Chatterji J., however, held that the word "ancestral" can only be used in a relative and not in a fixed or absolute sense in customary law, and before this character can be predicated of any property in the hands of a male owner, it must be found that it has descended to him from a male ancestor and in the case of a claim by collaterals, from a male ancestor common to him and the claimants. It is apparent from the majority judgment that the learned judges did not find the alleged custom about the character of the property proved by any evidence. They proceeded to deal with the question rather on a priori considerations and the main basis for the decision appears to be that the property cannot lose its character of ancestral property merely because it has come through a female who succeeded her father in default of male heirs. Chatterji J. dissented from this (1) [1895] 30 P.R. 124. 1104 approach. He observed that he could not recall any instance in which property derived from or through any female ancestor among Hindus had been decided to fall within the category of ancestral property under the customary law. He also pointed out that the statement of the learned author of the Digest on the Customary Law of the Punjab on this point did 'not support the majority view. Thus it would not be unreasonable to say that the majority decision in this case is not a decision on the proof of custom as such. The same point was again raised before a Full Bench of the High Court of Punjab in Musammat Attar Kaur vs Nikkoo (1). Sir Shadi Lal C. T. who delivered the principal judgment of the Full Bench conceded that there was " a great deal to be said in favour of the proposition that, unless the land came to a person by descent from a lineal male ancestor in the male line, it should not be treated as ancestral." He also conceded that the decision in the earlier Full Bench case of Lehna (2) did not rest upon any evidence relating to custom on the subject but was based on what the majority of the judges considered to be the general principles of the customary law, and upon the argument abinconvenienti. The learned Chief Justice then took into account the fact that the question about the character of such property even under the Hindu law was not free from doubt and he referred to the conflict of judicial opinion on the said point. Having regard to this conflict the learned Chief Justice was not inclined to reopen the issue which had been concluded by the earlier Full Bench decision, and basin(, himself on the doctrine of stare decisis he held that the majority decision in Lehna 's case (2), should be treated as good law. It would be noticed that the judgment of Sir Shadi Lal C. J. clearly indicates that, on the merits, he did not feel quite happy about the earlier decision in Lehna 's case (2). It appears that the same question was again raised before another Full Bench of the High Court of Punjab in Narotam Chand vs Mst. Durga Devi (3). In this (1) Lah. 356. (2) [1895] 30 P.R. 124. (3) I.L.R. 1105 case the main question which arose for decision was under article 2 of the Punjab Limitation (Custom) Act I of 1920. This article governs suits for possession of ancestral immoveable property which has been alienated on the ground that the alienation is not binding on the plaintiff according to custom. It provides for two periods of limitation according as a declaratory decree is or is not claimed. In dealing with the point as to whether the suit in question attracted the provisions of article 2 of Act I of 1920, the Full Bench had to consider whether the property in suit was ancestral property or not; and that raised the same old question whether property from maternal grand father in the hands of a grandson can be described as ancestral property or that such property in the hands of a daughter can be given that description. The matter appears to have been elaborately argued before the Full Bench. The previous Full Bench decisions were cited and reference was made to two decisions of the Privy Council which we will presently consider. Mahajan J., as he then was, who delivered the main judgment of the Full Bench held that the property inherited by a Hindu from his maternal grandfather is not ancestral qua his descendants under the customary law of the Punjab. The learned judge also held that the two Privy Council decisions cited before the court had in effect overruled the earlier Full Bench decisions of the Punjab High Court. It is this last decision of the Full Bench which has been followed by the High Court in the present proceedings. The appellant contends that the high Court was in error in not following the earlier Full Bench decisions on this point and it is urged on his behalf that the decision of the last Full Bench in Narotam Chand 's case (1), should not be accepted as correct. We do not think that the appellant 's contention is well founded. So far as the statement of the customary law itself is concerned, Rattigan 's Digest which is regarded as an authority on the subject, does not support the appellant 's case. Inpara. 59 of the Digest of Civil Law for the Punjab chiefly based on the customary law it is (1) I.L.R. 1106 stated that ancestral immoveable property is ordinarily inalienable (especially amongst Jats, residing in the Central Districts of the Punjab) except for necessity or with the consent of male descendants or, in the case of a sonless proprietor, of his male collaterals. Provided that the proprietor can alienate ancestral immoveable property at pleasure if there is at the date of such alienation neither a male descendant nor a male collateral in existence. Following this statement of the law the learned author proceeds to explain the meaning of ancestral property in these words: "Ancestral property means, as regards sons, property inherited from a direct male lenial ancestor, and as regards collaterals property inherited from a common ancestor ". Thus, so far as the customary law in the Punjab can be gathered, the statement of Rattigan is clearly against the appellant. Then as regards the first Fall Bench decision in Lehna 's case (1), as we have already pointed out, there is no discussion about any evidence of custom and indeed no evidence about the alleged custom appears to have been led before the learned judges. It is, therefore, difficult to accept this decision as embodying the learned judges ' considered view on the question of custom as such. That in effect is the criticism made by Chatterji J. in his dissenting judgment and we are inclined to agree with the views expressed by Chatterji J. When this question was raised before the second Full Bench in Mst. Attar Kaur 's case (2), Sir Shadi Lal C. J. rested his decision on stare decisis mainly because the true position on the said question even under the Hindu law was then in doubt. This consideration has now lost all its validity because, as we have already indicated, the true position under the Hindu law about the character of such property has been authoritatively explained by Sir Shadi Lal himself in the Privy Council decision in Muhammad Husain Khan 's case (3 ). That is why we think not much useful guidance or help can be derived from this second Full Bench decision. The last Full Bench decision in Narotam Chand 's case (4), is (1) [1895] 30 P.R. 124. (2) Lah. (3) (1937) L.R. 64 I.A. 250. (4) I.L.R. 1107 based substantially on the view that, as a result of the Privy Council decision in Muhammad Husain Khan 's case (1), the two earlier Full Bench decisions must be taken to have been overruled. Besides, the learned judges who constituted this Full Bench have also examined the merits of the two earlier judgments and have given reasons why they should not be takedas correctly deciding the true position under the customary law. In our opinion, the view taken by this Full Bench is on the whole correct and must be confirmed. It would now be necessary to consider the two Privy Council decisions on which reliance has been placed by Mahajan J., as he then was, in support of his conclusion that they have overruled the earlier Full Bench decisions. In Attar Singh vs Thakar Singh(") the Privy Council was dealing with a suit by Hindu minors to set aside their father 's deed of sale of the lands in suit to the defendants on the ground that they were ancestral. It was held that, as the plaintiffs claimed through their father as son and heir of Dhanna Singh, the onus was on them to show that the lands were not acquired by Dhanna Singh and, as that onus was not discharged, the lands must be deemed to be acquired properties of Dhaiina Singh and that deed could not be set aside. The parties to this litigation were governed by the customary law of the Punjab. In dealing with the character of the property in suit, Lord Collins who delivered the judgment of the Board observed that " it is through father, as heir of the above named Dhanna Singh, that the plaintiffs claimed, and unless the lands came to Dhanina Singh by descent from a lineal male ancestor in the male line, through whom the plaintiffs also in like manner claimed, they are not deemed ancestral in Hindu law. " This statement indicates that, according to the Board, it is only where property descends from the lineal male ancestor in the male line that it partakes of the character of ancestral property. It may be conceded that the question as to whether property inherited from a maternal grandfather is ancestral property or (1) (1937) L.R. 64 I.A. 250. (2) (1908) L.R. 35 I.A. 206. 141 1108 not did not arise for the decision of the Board in this case; but it is significant that the words used by Lord Collins in describing the true position under the Hindu law in regard to the character of ancestral property are emphatic and unambiguous and this statement has been made while dealing with the case governed by the customary law of the Punjab. This statement of the law was cited with approval and as pertinent by Sir Shadi Lal when he delivered the judgment of the Board Muhammad Husain Khan 's case (1). The learned judge has then added that " Attar Singh 's case (2), however, related to the property which came from male collaterals and not from the maternal grandfather and it was governed by the custom of the Punjab; but it was not suggested that the custom differed from the Hindu law on the issue before their Lordships ". The effect of these observa tions would clearly appear to be that the test laid down in Attar Singh 's case(2) would apply as much to the Hindu law as to the customary law of the Punjab. In our opinion, these observations made by Sir Shadi Lal are entitled to respect and have been rightly relied upon by Mahajan J., as he then was, in the last Full Bench case (Narotam Chand 's case (3)), to which we have already referred. We may add that it may not be technically correct to say that these observations overrule the earlier Full Bench decision of the Punjab High Court on the point. We entertain no doubt that, if the relevant observations of Lord Collins in Attar Singh 's case (2) had been considered in the second Full Bench decision, they would have hesitated to rely on the doctrine of stare decisis in support of their final decision. There is one more point which still remains to be considered. Having regard to the principle of stare decisis, would it be right to hold that the view expressed by the High Court of Punjab as early as 1895 was erroneous ? the principle of stare decisis is thus stated in Halsbury 's Laws of England(4): (1) (1937) L.R. 64 I.A. 250. (2) (1908) L.R. 35 I.A. 206. (3) I.L.R. (4) 2nd Edn., Vol. XIX, P. 257, para. 1109 " Apart from any question as to the Courts being of co ordinate jurisdiction, a decision which has been followed for a long period of time, and has been acted upon by persons in the formation of contracts or in the disposition of their property, or in the general conduct of affairs, or in legal procedure or in other, ways, will generally be followed by courts of higher authority than the court establishing the rule, even though the court before whom the matter arises afterwards might not have given the same decision had the question come before it originally. But the supreme appellate Court will not shrink from overruling a decision, or series of decisions, which establish a doctrine plainly outside the statute and outside the common law, when no title and no contract will be shaken, no persons can complain, and no general course of dealing be altered by the remedy of a mistake. " The same doctrine is thus explained in Corpus Juris Secundum(1) " Under the stare decisis rule, a principle of law which has become settled by a series of decisions generally is binding on the courts and should be followed in similar cases. This rule is based on expediency and public policy, and, although generally it should be strictly adhered to by the courts, it is not universally applicable. " The Corpus Juris Secundum (2), however, adds a rider that "previous decisions should not be followed to the extent that grievous wrong may result; and, accordingly, the courts ordinarily will not adhere to a rule or principle established by previous decisions which they are convinced is erroneous. The rule of stare decisis is not so imperative or inflexible as to preclude a departure therefrom in any case, but its application must be determined in each case by the discretion of the court, and previous decisions should not be followed to the extent that error may be perpetuated and grievous wrong may result. " In the present case it is difficult to say that the doctrine of stare decisis really applies because the (1) VOL XXI P. 302, para. 187. (2) VOI. P. 322, para. 110 Correctness of the first Full Bench decision has been challenged in the Punjab High Court from time to time and in fact the said decision has been reversed in .950. Besides, in 1908, the Privy Council made emphatic observations in Attar Singh 's case (1) which considerably impaired the validity of the first Full Bench decision ; so it would be difficult to say that the decision of the first Full Bench has been consistently followed by the community since 1895. It cannot also be said that reversal of the said decision shakes any title or contract. The only effect of the said decision was to confer upon the son of the person who inherited the property from his maternal grandfather the right to challenge his alienation of the said property. It is doubtful if such a right can be regarded as the right in property. It merely gives the son 'in option either to accept the transaction or to avoid it. It cannot be said today that any pending actions would be disturbed because this right has already been taken away by the Full Bench in 1950. In this connection, it may also be relevant to consider another aspect of this matter. If it is held that the property inherited from maternal grandfather is not ancestral property, then it would tend to make the titles of the alienees of such property more secure. Besides, we are satisfied that the decision of the first Full Bench is wholly unsustainable as a decision on the point of the relevant custom. We are, therefore, inclined to take the view that the doctrine of stare decisis is in applicable and should present no obstacle in holding that the earlier cases of the Full Bench of the Punjab High Court were not correctly decided. In the result we confirm the finding of the High Court that the property in suit is not ancestral property and that the appellant has no right to bring the present suit. The appeal accordingly fails and must be dismissed. The appellants will pay the respondent 's costs in this Court; and parties will bear their own costs in the courts below. Appeal dismissed. (1) (1908) L.R. 35 I.A. 2o6.

Under the customary law of the Punjab property inherited by a Hindu male from his maternal grandfather is not ancestral property qua his sons. Narotam Chand vs Mst. Durga Devi, I. L. R. (1950) Punj. 1, approved. Lehna vs Musammat Thakyi, (1895) 30 P. R. I24 and Musammat Attar Kaur vs Nikkoo, Lah. 356, not approved. The rule of stare decisis is not an inflexible rule and is inapplicable where the decision is clearly erroneous and when its reversal does not shake any titles or contracts or alter the general course of dealing.

vil Appeal No. 1088 (N) of 1969. From the Judgment and Order dated 14.8.1968 of the punjab and Haryana High Court in L.P.A. No. 95 of 1964. A. Minocha for the Appeallant. Ms. A. Subhashini, Mrs. section Sun, C.V.S. Rao and P. Par meshwaran for the Respondents. The Judgment of the Court was delivered by B.C. RAY, J. This is an appeal by special leave against the Judgment and Order made in L.P.A. No. 95 of 1964 dis missing the appeal holding that the land in question having already vested in the Government of Punjab under package deal, the authority under the Displaced Persons (Compensa tion and Rehabilitation) Act, 1954 had no jurisdiction over lands in question. Appellant, Pala Singh, a displaced person, was allotted 9 standard acres and 12 1/4 units of land in village Jhill, Tehsil and District Patiala in lieu of his land left in Chack No. 204 in 1950. He got the same quantity of land in village Alipur Arain on mutual exchange with an allottee of the said village. The appellant was not allotted any land for the land left by him in village Santpura and Jaffapur in Tehsil Phalia, District Gujarat. The area of Chack No. 204 R.B. was described as a suburban area by the State Govern ment. The appellant applied for allotment in village Tripari Sayidan, a suburban of Patiala City. After due verification from the records of the Rehabilitation Department at Jullun dur, the petitioner being found entitled to the suburban allotment to the tune of 10 standard acres and two units as also to a rural allotment of 2 standard acres and 8 units was allotted 6 standard acres 12 3/4 units of land in Tri pari Sayidan. Proprietary right in respect of both these allotments, that is, at Tripari Sayidan and village Alipur Arian were granted to him vide sanads dated 17th February, 1956. 627 In October 1961, it was detected that there was excess allotment of 6 standard acres and 12 3/4 units in village Alipur Arian and accordingly the Managing Officer, Rehabili tation Department by his order dated 21st February, 1962 allowed the petitioner to purchase the said excess area. Petitioner deposited the required amount in the Treasury on March 6, 1962. On March 27, 1962, i.e. 20 days thereafter the petitioner was served with a notice by the respondent No. 3, Assistant Registrar cum Managing Officer asking him to appear before the respondent No. 2, the Chief Settlement Commissioner, Civil Secretariat. Jullundur to show cause why the order of the Managing Officer allowing him to purchase the excess land should not be set aside, as it was a case of double allotment. The respondent No. 2, the Chief Settlement Commissioner, after hearing the petitioner passed an order holding that the excess land which was found in October 1961 could not be sold by the Managing Officer under the Dis placed Persons (Compensation and Rehabilitation) Act, 1954, as under the package deal this land had been transferred to the Punjab Government. It was for the Punjab Government to decide if the said land would be sold to the petitioner at the reserve price or not. The reference was accordingly allowed and the order of the Managing Officer allowing the allottee to purchase the said 6.12 3/4 standard acres in village Alipur Arian, Tehsil District Patiala was set aside. The petitioner then made an application under Section 33 of the said Act to the respondent No. 1, the Central Government against the said order. The said application was dismissed by the respondent No. 1. Against these orders the petitioner moved a petition under Articles 226 and 227 of the Constitu tion of India before the High Court of Punjab and Haryana under Civil Writ Petition No. 1804 of 1962 on the grounds inter alia that the petitioner is entitled to get the same land as he had already deposited the price of the allotted land in accordance with the order of the Managing Officer. The said purchase could not be cancelled on the plea that the land had already been transferred to Punjab Government by the Central Government under package deal. A return was filed on behalf of the respondents stating inter alia that in lieu of land to the extent of 6.12 3/4 standard acres allotted to him in village Tripari Sayidan, an area to the same extent was to be withdrawn from his rural allotment in village Alipur Arian. This however was not done through oversight and the allottee was in posses sion of the both lands in villages Alipur Arian and Tripari Sayidan. This resulted in double allotment to the petition er. It was also submitted therein that the Managing Officer wrongly allowed the petitioner to purchase the said land in village Alipur Arian in February 1962. The 628 order of the Managing Officer was without jurisdiction as by that time property had gone out of the Compensation Pool and it vested in the State Government. It was further averred that the transfer of the land in dispute to the petitioner was void ab initio as under the package deal it vested in the State Government. Respondent No. 2 has rightly cancelled the allotment of excess land to the petitioner. The writ petition was dismissed by the learned Single Judge holding inter alia that the Chief Settlement Commis sioner (Lands) had jurisdiction to cancel the allotment even after the conferment of the proprietary right referring to the decision in the case of Smt. Balwant Kaur vs Chief Settlement Commissioner, It was further held that the package deal came about in April 1961 whereas the offer to purchase the excess land was made in February, 1962. i.e. at a time when the land was no longer in the Central pool but it vested in the State of Punjab. The Chief Settlement Commissioner was justified in cancel ling the permission to purchase given by the Managing Offi cer as the land had already been transferred to the State of Punjab and the same ceased to vest in the Central Compensa tion Pool. Aggrieved by the judgment and order dated 16th January, 1964 passed in C.W.P. No. 1804 of 1962 an appeal under clause X of the Letters Patent was preferred by the peti tioner. This was registered as L.P.A. No. 95 of 1964. On 14th August, 1968, the Division Bench of Punjab High Court after hearing the parties held that there was no denial by the appellant that in view of the package deal the title to the land had already passed to the Punjab Government in 1961 and no authority under the could make any order in regard to the sale of land to the appellant at concessional rate. The title had passed to the Punjab Government in 1961 and after that it was only the Punjab Government who could deal with that land. It was further held that there was no denial that the land in question was covered by the package deal. The only contention made by the appellant was that an appeal was filed in the Supreme Court from the judgment in the case of Ram Chander vs State of Punjab, [1968] Current Law Jour nal (Punjab & Haryana) 668 wherein the validity of the package deal was upheld. It was held that if the appeal succeeds in this Court then it would be up to the Chief Settlement Commissioner to review his own orders in the wake of such decision of the Supreme Court in order to give relief to the appellant. The appeal was accordingly dis missed. 629 It is against this judgment and order this appeal by special leave has been filed. It appears from the letters dated 3.6.1961, 5.3.1962 as well as 23.3. 1963 issued from the office of Chief Settle ment Commissioner, Government of India that all surplus lands as well as excess area in occupation of the allottees stood transferred to the Punjab Government with effect from 1.4.1961 and the Punjab Government paid the price of the lands at the rate of Rs.445 per standard acre to the Central Government by half yearly instalments in 6 instalments within a period of three years commencing from 1st April, 1961. So these lands are package deal properties vested in the State of Punjab. It has been rightly held in the Letters Patent Appeal confirming the order of the learned Single Judge in the writ petition that since the excess land allot ted to the appellant was package deal property the same cannot be sold nor can it be allowed to be sold to the petitioner appellant by the Managing Officer under the provisions of Displaced Persons (Compensation and Rehabili tation) Act, 1954. So the order of the Managing Officer made in February, 1962 is wholly without jurisdiction inasmuch as the said property was no ' longer in the compensation pool of the Central Government but it was a package deal property vested in the State of Punjab. It has also been rightly held that the Chief Settlement Commissioner is competent under Section 24 of the Displaced Persons (Compensation and Reha bilitation) Act 44 of 1954 to cancel the allotment of land in excess of the area the petitioner is entitled to get under the provisions of the said Act. This legal position has been settled by a decision of the Punjab and Haryana High Court in the case of Ram Chander vs State of Punjab (supra) wherein it has been held: "In our opinion, the package deal has the effect of transferring the property from the Central Government to the Punjab State and the logical result which flows from it is that the Settlement Authorities as delegates of the Central Government could not pass any orders under the Act. " It appears that the Civil Appeal No. 470 of 1969 which was filed against the judgment and order passed in LPA No. 298 of 1966 was disposed of by this Court (to which both of us were parties) on 29th July, 1986 by recording the follow ing order: "In view of the judgment in Civil Appeal Nos. 2125(N) of 1968 and 1832 of 1969, there is no reason to consider the question of law raised by the State of Haryana in this 630 appeal. The appeal is accordingly disposed of without expressing any opinion on the merits. " It also appears that this Court passed an order on 29th July, 1986 dismissing Civil Appeal Nos. 2125(N) of 1968 and 1832 of 1969 by recording the following order: "There is no merit in these appeals. By the judgment, the High Court has set aside the sales and directed re auction of the proper ties. We entirely agree with the reasoning and conclusion reached by the High Court. The appeals are accordingly dismissed with no order as to costs. " It is therefore clear and evident that the judgment of the Punjab High Court rendered in the case of Ram Chander vs State of Punjab & Ors. (supra) insofar as it relates to the validity of the package deal, has been upheld by this Court. So there is no merit in this contention made on behalf of the appellant. It has also been held by the Full Bench of the Punjab High Court in the case of Smt. Balwant Kaur vs Chief Settle ment Commissioner (Lands), Punjab, [1963] Punjab Law Report er (Vol. 65) 1141 at 1187 that the Chief Settlement Commis sioner was competent to cancel or set aside the order of transfer even if the sanad was granted or the sale deed had been executed and on such order being made the sanad or the sale deed will automatically fall with it. On a conspectus of these decisions the point is now well settled that the respondent No. 2, the Chief Settlement Commissioner has duly and properly made the impugned order of cancellation of the excess allotment made to the appel lant. It appears that the petitioner has already made an application to the Government for allotment to them of the said excess land on taking from them the appropriate price. It has been further stated that Pala Singh had died during the pendency of this appeal and he left his widow and four sons and daughters as his legal representatives. It is for the Government of Punjab to consider and decide whether the legal representatives of deceased appellant are entitled to pourchase the said excess land under the provisions of the Punjab Package Deal Properties (Disposal) Act, 1976 and the rules framed thereunder. It is relevant to mention in this connection that the Gov ernment 631 of Punjab amended the rules and the said amended rules have been titled as Punjab Package Deal Properties (Disposal) Rules, 1976. These rules lay down elaborate procedure as to how the lands in excess of the entitlement which have been cancelled may be transferred to the allottees or their successors in interest. It also appears from Rule 4 that the allottee or his legal representatives will not be entitled to have the excess land which was cancelled on the ground of fraud, concealment or mis representation of material facts. It is also provided in clause 8 of the said rules that the price of the land that will be transferred shall be the current market price to be determined by the Tehsildar (Sales). For the reasons aforesaid there is no merit in the appeal and as such it is dismissed with costs, assessed at Rs. 1,000. P.S.S. Appeal dis missed.

All the surplus lands in the compensation pool of the Central Government as well as the excess area in the occupa tion of allottees were transferred under a package deal to the Punjab Government with effect from April 1, 1961. In October 1961 the Managing Officer, Rehabilitation Department detected that there was excess allotment of land to the appellant in lieu of land left by him in Pakistan. By an order dated February 21, 1962 he allowed the petitioner to purchase the said excess area. The petitioner deposited the required amount in the Treasury on March 6, 1962. On reference, the Chief Settlement Commissioner held that the excess land which was found in October 1961 could not be sold by the Managing Officer under the as under the package deal this land had been transferred to the Punjab Government. The petitioner then made an application under section 33 of the said Act to the Central Government which was dismissed. Thereupon he moved a petition under Articles 226 and 227 of the Constitution before the High Court, and contended that he is entitled to get the same land as he had already depos ited the price in accordance with the order of the Managing Officer, and that the said purchase could not be can 625 celled on the plea that the land had already been trans ferred to the Punjab Government by the Central Government under the package deal. The petition was opposed by the respondent, who contended that the transfer of the land in dispute to the petitioner was void ab initio as under the package deal it vested in the State Government. The High Court held that the Chief Settlement Commissioner (Lands), had jurisdiction to cancel the allotment even after confer ment of the proprietary right, that in view of the package deal the title to the land had already passed to the Punjab Government in 1961 and no authority under the Displaced Persons Act could make any order in regard to the sale of the land to the appellant at a concessional rate, and that only the Punjab Government could deal with the said land. Dismissing the appeal by special leave, HELD: 1. The Chief Settlement Commissioner had duly and properly made the order. He was competent under section 24 of the to cancel the allotment of land in excess of the area the petitioner was entitled to get under the provisions of the Act. [630F, 629E] Smt. Balwant Kaur vs Chief Settlement Commissioner (Lands), Punjab, [1963] Punjab Law Reporter (Vol. 65) 1141 at 1187, approved. The excess land allotted to the appellant was package deal property vested in the State of Punjab. As such the same could not be sold nor could it be allowed to be sold to the petitioner appellant by the Managing Officer under the provisions of the Displaced Persons Act. The order of the Managing Officer, was, therefore, wholly without jurisdic tion inasmuch as the said property was no longer in the compensation pool of the Central Government. [629CD] Ram Chander vs State of Punjab, [1968] Current Law Journal (Punjab & Haryana) 668 approved. It is for the Government of Punjab to consider and decide whether the legal representatives of the deceased appellant are entitled to purchase the said excess land under the provisions of the Punjab Package Deal Properties (Disposal) Act, 1976. The Punjab Package Deal Properties (Disposal) Rules, 1976 prescribe procedure as to how the lands in excess of the entitlement, which have been can celled, may be transferred to the allottees or their succes sors in interest. Rule 4 lays down that the allottee or his legal representatives will not be entitled to 626 have the excess land which was cancelled on the ground of fraud, concealment or mis representation of material facts. It is also provided in clause 8 of the said rules that the price of the land that will be transferred shall be the current market price to be determined by the Tehsildar (Sales). [630G, 63lAB]

candidates contest the election for the mere sake of contesting, with a view to make out grounds for challenging the election. They poll only paltry number of votes. Parliament should devise ways and means to meet the onslaught of such independent candi dates who are not quite serious about their business. [402G, 403B, G] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 430 of 1982. From the Judgment and Order dated 12.10.1981 of the Allahabad High Court in E.P. No. 1 of 1981. Appeallent in person Dr. Y.S. Chitale, N. Nettar, G.S. Narayan Rao and R.B. Datar for the Respondent. The Judgment of the Court was delivered by SINGH, J. This appeal under Section 116 A of the Representa 379 tion of the People Act 1951 is directed against the order of the High Court of Alahabad (Lucknow Bench) dated 12.10.1981 rejecting the election petition filed by the appellant questioning the election of the respondent as member of the Lok Sabha. A bye election was held on June 14, 1981 to fill up the vacancy to the Lok Sabha caused by the death of Sanjay Gandhi in the 25th Amethi Constituency in District Sultanpur in the State of Uttar Pradesh. The appellant, the respondent and 13 other candidates contested the election. On 15th June 1981 Rajiv Gandhi was declared elected having polled 258884 votes while the appellant polled 2728 votes only. The appel lant filed an election petition under Section 80 of the Representation of the People Act 1951 (hereinafter referred to as the Act) questioning the validity of the election of the respondent on a number of grounds, including the allega tions of corrupt practice of undue influence, hiring and procuring of vehicles for carrying voters and obtaining the assistance of Government servants and incurring expenses at the election in excess of the permissible limit. The High Court issued notice to the respondent who appeared before it and made an application under Order VI Rule 16 of the Code of Civil Procedure for striking out the pleadings contained therein as the same were vague, general, unnecessary, frivo lous and vexatious which did not disclose any cause of action. Respondent further prayed that the election petition be rejected under Order VII Rule 11 of the Civil Procedure Code read with Section 87 of the Act. A learned Single Judge of the High Court before whom the preliminary objections were raised caused service of the copy of the objections on the appellant who was appearing in person and granted time to him to submit his reply. The appellant, however, did not submit any reply to the prelimi nary objections and in spite of date being fixed for hearing arguments in his presence he did not appear before the Court on the date fixed for arguments. The learned Judge after hearing the arguments advanced on behalf of the respondent passed an order on 12th October 1981 holding that the var ious paragraphs contained in the petition were vague and the same did not contain sufficient averments to constitute any corrupt practice and the various paragraphs of the petition were unnecessary, frivolous and vexatious within the meaning of Order VI Rule 16 of the Code of Civil Procedure. The learned Judge struck off paragraphs 2 to 53, 55 to 57 and rejected the petition under Order VII Rule 11 read with Section 87 of the Act on the ground that the election peti tion did not disclose any cause of action. The appellant has preferred this appeal against the said order. 380 The election under challenge relates to 198 1, its term expired in 1984 on the dissolution of the Lok Sabha, there after another general election was held in December, 1984 and the respondent was again elected from 25th Amethi Con stituency to the Lok Sabha. The validity of the election held in 1984 was questioned by means of two separate elec tion petitions and both the petitions have been dismissed. The validity of respondent 's election has been upheld in Azhar Hussain vs Rajiv Gandhi, ; and Bhagwati Prasad vs Rajiv Gandhi, ; Since the impugned election relates to the Lok Sabha which was dissolved in 1984 the respondent 's election cannot be set aside in the present proceedings even if the election petition is ulti mately allowed on trial as the respondent is a continuing member of the Lok Sabha not on the basis of the impugned election held in 1981 but on the basis of his subsequent election in 1984. Even if we allow the appeal and remit the case to the High Court the respondent 's election cannot be set aside after trial of the election petition as the relief for setting aside the election has been rendered infructuous by lapse of time. In this view grounds raised in the peti tion for setting aside the election of the respondent have been rendered academic. Court should not undertake to decide an issue unless it is a living issue between the parties. If an issue is purely academic in that its decision one way or the other would have no impact on the position of the par ties, it would be waste of public time to engage itself in deciding it. Lord Viscount Simon in his speech in the House of Lords in Sun Life Assurance Company of Canada vs Jervis, observed; "1 do not think that it would be a proper exercise of the Authority which this House possesses to hear appeals if it occupies time in this case in deciding an academic question, the answer to which cannot affect the respondent in any way. It is an essential quality of an appeal fit to be disposed of by this House that there should exist between the parties a matter in actual controversy which the House undertakes to decide as a living issue. " These observations are relevant in exercising the appellate jurisdiction of this Court. The main controversy raised in the present appeal re garding setting aside of the respondent 's election has become stale and academic, but precious time of the apex Court was consumed in hearing the appeal at Length on ac count of the present state of law. Section 98 read with Section 99 indicates that once the machinery of the Act is moved by means of an election petition, charges of corrupt practice, if any, raised against the returned candidate must be investigated. On conclusion of the trial if the Court finds that a returned candidate or any of his election agent is guilty of commission of corrupt practice he or his 381 election agent, as the case may be, would be guilty of electoral offence incurring disqualification from contesting any subsequent election for a period of six years. In this state of legal position we had to devote considerable time to the present proceedings as the appellant insisted that even though six years period has elapsed and subsequent election has been 'held nonetheless if the allegations made by him make out a case of corrupt practice the proceedings should be remanded to the High Court for trial and if after the trial the Court finds him guilty of corrupt practice the respondent should be disqualified. If we were to remand the proceedings to the High Court for trial for holding inquiry into the allegations of corrupt practice, the trial itself may take couple of years, we doubt if any genuine and bona fide evidence could be produced by the parties before the Court, in fact, during the course of hearing the appellant himself stated before us more than once, that it would now be very difficult for him to produce evidence to substanti ate the allegations of corrupt practice but nonetheless he insisted for the appeal being heard on merits. Though the matter is stale and academic yet having regard to the present state of law, we had to hear the appeal at length. Before we consider the submissions on merit, we would like to say that Parliament should consider the desirability of amending the law to prescribe time limit for inquiry into the allegations of corrupt practice or to devise means to ensure that valuable time of this Court is not consumed in election matters which by efflux of time are reduced to mere academic interest. Election is the essence of democratic system and purity of elections must be maintained to ensure fair election. Election petition is a necessary process to hold inquiry into corrupt practice to maintain the purity of election. But there should be some time limit for holding this inquiry. Is it in public interest to keep sword of Damocles hanging on the head of the returned candidate for an indefinite period of time as a result of which he cannot perform his public duties and discharge his obligations to his constituents? We do not mean to say that the returned candidate should be permitted to delay proceedings and to plead later on the plea of limitation. Ways and means should be found to strike a balance in ascertaining the purity of election and at the same time in preventing waste of public time and money and keeping the sword of Damocles hanging on the head of returned candidate for an indefinite period of time. The appellant appeared in person and argued the ease vehemently for a number of days. He made three submissions: (i) The High Court had no jurisdiction to entertain prelimi nary objections under 382 Order VI Rule 16 or to reject the election petition under Order VII Rule 11 of the Code of Civil Procedure before the respondent had filed his written statement to the petition. In rejecting the petition under Order VII Rule 11 the High Court deprived the appellant opportunity of amending the petition by supplying material facts and particulars. (ii) Allegations contained in various paragraphs of the election petition constituted corrupt practice which disclosed cause of action within the meaning of Section 100 of the Act. The High Court committed error in holding that the petition was defective on the premise that it did not disclose any tri able issue. (iii) The election petition disclosed primary facts regarding corrupt practice and if there was absence of any particulars or details the High Court should have af forded opportunity to the appellant to amend the petition. The first question which falls for our determination is whether the High Court had jurisdiction to strike out plead ings under Order VI Rule 16 of the Code of Civil Procedure and to reject the election petition under Order VII Rule 11 of the Code at the preliminary stage even though no written statement had been filed by the respondent. Section 80 provides that no election is to be called in question except by an election petition presented in accordance with the provisions of Part VI of the Act before the High Court. Section 81 provides that an election petition may be pre sented on one or more of the grounds specified in Section 100 by an elector or by a candidate questioning the election of a returned candidate. Section 83 provides that an elec tion petition shall contain a concise statement of material facts on which the petitioner relies and he shall set forth full particulars of any corrupt practice that he may allege including full statement of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice. Section 86 confers power on the High Court to dismiss an election petition which does not comply with the provisions of Sec tions 81 and 82 or Section 117. Section 87 deals with the procedure to be followed in the trial of the election peti tion and it lays down that subject to the provisions of the Act and of any rules made thereunder, every election peti tion shall be tried by the High Court as nearly as may be in accordance with the procedure applicable to the trial of suits under the Code of Civil Procedure, 1908. Since provi sions of Civil Procedure Code apply to the trial of an election petition, Order VI Rule 16 and Order VII Rule 11 are applicable to the proceedings relating to the trial of an election petition subject to the provisions of the Act. On a combined reading of Sections 81, 83, 86 and 87 of the Act, it is apparent that those paragraphs of a petition which do not disclose any cause of 383 action are liable to be struck off under Order VI Rule 16, as the Court is empowered at any stage of the proceedings to strike out or delete pleading which is unnecessary, scandal ous, frivolous or vexatious or which may tend to prejudice, embarrass or delay the fair trial of the petition or suit. It is the duty of the Court to examine the plaint and it need not wait till the defendant files written statement and points out the defects. If the court on examination of the plaint or the election petition finds that it does not disclose any cause of action it would be justified in strik ing out the pleadings. Order VI Rule 16 itself empowers the Court to strike out pleadings at any stage of the proceed ings which may even be before the filing of the written statement by the respondent or commencement of the trial. If the Court is satisfied that the election petition does not make out any cause of action and that the trial would preju dice, embarrass and delay the proceedings, the court need not wait for the filing of the written statement instead it can proceed to hear the preliminary objections and strike out the pleadings. If after striking out the pleadings the court finds that no triable issues remain to be considered, it has power to reject the election petition under Order VII Rule 11. In K. Kamaraja Nadar vs Kunju Thevar and Ors., the Election Tribunal and the High Court both re fused to consider preliminary objections raised by the returned candidate at the initial stage on the ground that the same would be considered at the trial of the election petition. This Court set aside the order and directed that the preliminary objection should be entertained and a deci sion reached thereupon before further proceedings were taken in the election petition. Bhagwati, J. speaking for the Court observed thus: "We are of opinion that both the Election Tribunal and the High Court were wrong in the view they took. If the preliminary objection was not entertained and a decision reached thereupon, further proceedings taken in the Election Petition would mean a full fledged trial involving examination of a large number of witnesses on behalf of the 2nd respondent in support of the numerous allegations of corrupt practices attributed by him to the appellant, his agents or others working on his behalf; examination of a large number of witnesses by or on behalf of the appellant controverting the allegations made against him; examination of witnesses in support of the recrimination submitted by the appellant against the 2nd respondent; and large 384 number of visits by the appellant from distant places like Delhi and Bombay to Ranchi result ing in not only heavy expenses and loss of time and diversion of the appellant from his public duty in the various fields of activity including those in the House of the People: It would mean unnecessary harassment and expenses for the appellant which could certainly be avoided if the preliminary objection urged by him was decided at the initial stage by the Election Tribunal. " In Udhav Singh vs Madhav Rao Scindia, ; this Court held that failure to plead even a single material fact leads to an incomplete cause of action and incomplete allegations of such a charge are liable to be struck off under Order VI Rule 16, Code of Civil Procedure. If the petition is based solely on those allegations which suffer from lack of material facts, the petition is liable to be summarily rejected for want of a cause of action. In Charan Lal Sahu & Ors., vs Giani Zail Singh & Anr., an election petition challenging the election of Giani Zail Singh, President was rejected summarily at the initial stage by a Constitution Bench of this Court on the ground that the pleadings contained in the election petition even assuming to be true and correct did not disclose any cause of action for setting aside the election of the returned candidate. The precise question as raised by the appellant was consid ered at length by this Court in Azhar Hussain vs Rajiv Gandhi and this Court held that the High Court while dealing with the election petition has power to strike out pleadings under Order VI Rule 16 and to reject the election petition under Order VII Rule 11 if the petition does not disclose essential facts to clothe it with complete cause of action. Failure to plead even a single material fact would amount to disobedience of the mandate of Section 83(1)(a) and election petition could therefore be and must be dismissed if it suffers from any such vice. The Court repelled the submis sion that the power to reject an election petition summarily under the Code of Civil Procedure should not be exercised at the threshold. The Court observed as under: "In substance the argument is that the Court must proceed with the trial, record the evi dence, and only after the trial of the elec tion petition is concluded that the powers under the Code of Civil Procedure for dealing appropriately with the defective petition which does not disclose cause of action should be exercised. With respect to the learned counsel, it is an argument which it is diffi cult to compre 385 hend. The whole purpose of conferment of such powers is to ensure that a litigation which is meaningless and bound to prove abortive should not be permitted to occupy the time of the court and exercise the mind of the respondent. The sword of Damocles need not be kept hanging over his head unnecessarily without point of purpose. Even in an ordinary civil litigation the court readily exercises the power to reject a plaint if it does not disclose any cause of action. Or the power to direct the concerned party to strike out unnecessary, scandalous, frivolous or vexatious parts of the pleadings. Or such pleadings which are likely to cause embarrassment or delay the fair trial of the action or which is otherwise an abuse of the process of law. An order directing a party to strike out a part of the pleading would result in the termination of the case arising in the context of the said pleadings. The courts in exercise of the powers under the Code of Civil Procedure can also treat any point going to the root of the matter such as one pertaining to jurisdiction or maintainability as a preliminary point and can dismiss a suit without proceeding to record evidence and hear elaborate arguments in the context of such evidence, if the court is satisfied that the action would terminate in view of the merits of the preliminary point of objection. The contention that even if the election petition is liable to be dismissed ultimately it should be so dismissed only after recording evidence is a thoroughly misconceived and untenable argument. The powers in this behalf are meant to be exer cised to serve the purpose for which the same have been conferred on the competent court so that the litigation comes to an end at the earliest and the concerned litigants are relieved of the psychological burden of the litigation so as to be free to follow their ordinary pursuits and discharge their duties. And so that they can adjust their affairs on the footing that the litigation will not make demands on their time or resources will not impede their future work, and they are free to undertake and fulfil other commitments. Such being the position in regard to matters per taining to ordinary civil litigation, there is greater reason for taking the same in regard to matters pertaining the elections. " In Bhagwati Prasad Dixit 'Ghorawala ' vs Rajiv Gandhi, this Court again reiterated that in an election petition pleadings have to be precise, 386 specific and unambiguous and if the election petition does not disclose a cause of action it should be rejected in limine. These authorities have settled the legal position that an election petition is liable to be dismissed in limine at the initial stage if it does not disclose any cause of action. Cause of action in questioning the validity of election must relate to the grounds specified in Section 100 of the Act. If the allegations contained in the petition do not set out grounds of challenge as contemplated by Section 100 of the Act and if the allegations do not conform to the requirement of Sections 81 and 83 of the Act, the pleadings are liable to be struck off and the election petition is liable to be rejected under Order VII Rule 11. A pleading if vague and general is embarrassing. If the alle gations contained in the election petition even assuming to be true and correct do not make out any case of corrupt practice or any ground under Section 100 of the Act, the pleading would be unnecessary, frivolous and vexatious. It is always open to strike out the same. If after striking out defective pleadings the Court finds that no cause of action remains to be tried it would be duty bound to reject the petition under Order VII Rule II of the Code of Civil Proce dure. If a preliminary objection is raised before the com mencement of the trial, the court is duty bound to consider the same it need not postpone the consideration for subse quent stage of the trial. The appellant placed reliance on the decision of this Court in Union of India vs Surjit Singh Atwal, ; in support of his submission that unless a plea is raised by the respondent in the written statement it is not open to the Court to strike out pleadings contained in the election petition. In Surjit Singh Atwal 's case plaintiff had filed a suit for recovery of certain amount of money which he claimed to be due to him from the Union of India under a contract. The Union of India filed a written state ment five years after the filing of the suit wherein they raised no plea that the contract between the parties was hit by failure to comply with the provisions of Section 175(3) of the Government of India Act, 1935. More than a dozen years after the institution of the suit and eight years after the filing of the written statement, an application for amendment of the written statement was filed on behalf of the Union of India raising a plea that the contract was hit by the failure to comply with the provisions of Section 175(3) of the Government of India Act, 1935. The trial court dismissed the suit in view of the additional plea raised in the written statement, but the High Court decreed the suit. On appeal by the Union of India this Court upheld the order of the High Court, and in that connection it observed that the illegality of the contract should have been specifically pleaded as required by Order VI Rule 8 and Order VIII Rule 2 of 387 the Code of Civil Procedure. The decision has no relevance to the question under consideration. The appellant then placed reliance on a Division Bench decision of Madhya Pradesh High Court in Vidya Charan Shukla vs G.P. Tiwari and Ors., AIR 1963 MP 356.In that case a Division Bench of the High Court held that the preliminary objections relating to non maintainability of an election petition should not be allowed to be raised by mere applications without filing a complete written statement. We do not find any justification to uphold this view. As discussed earlier Order VI Rule 16 of Civil Procedure Code permits striking of pleadings at any stage of proceedings. It does not admit of any exception that the respondent must file written statement before the preliminary objections could be entertained. In view of this Court 's decisions as discussed earlier the view taken by the Madhya Pradesh High Court in Vidya Charan Shukla 's case is no longer a good law. The appellant 's grievance that in entertaining the preliminary objections and rejecting the election petition under Order VII Rule 11 the High Court deprived the appel lant 's opportunity to amend the petition and to make good the deficiencies by supplying the necessary particulars and details of the corrupt practice alleged in the petition, is devoid of any merit. Firstly, the appellant was free to file amendment application, but at no stage he expressed any desire to make any amendment application nor he made any application to that effect before the High Court. It was open to the appellant to have made that application but he himself did not make any such application. The High Court was under no legal obligation to direct the appellant to amend pleadings or to suo moto grant time for the same. Secondly, the allegations of corrupt practice as required by Section 83 were not complete and the same did not furnish any cause of action, any amendment made after the expiry of the period of limitation could not be permitted which would amount to raising a new ground of challenge. The question, however, does not arise as the appellant did not file any amendment application. During the course of hearing of this appeal before us the appellant has made applications for amendment of the election petition which we shall deal later. Before we consider various paragraphs of the election petition to determine the correctness of the High Court order we think it necessary to bear in mind the nature of the right to elect, the right to be elected and the right to dispute election and the trial of the election petition. Right to contest election or to question the election by means of an election petition is neither common law nor fundamental right 388 instead it is a statutory right regulated by the statutory provisions of the Representation of the People Act, 195 1. There is no fundamental or common law right in these mat ters. This is well settled by catena of decisions of this Court in N.P. Ponnuswami vs Returning Officer, 18; Jagan Nath vs Jaswant Singh, ; and Joyti Basu vs Debi Ghosal, ; These decisions have settled the legal position that outside the statutory provi sions there is no right to dispute an election. The Repre sentation of the People Act is a complete and self contained code within which any rights claimed in relation to an election or an election dispute must be found. The provi sions of the Civil Procedure Code are applicable to the extent as permissible by Section 87 of the Act. The scheme of the Act as noticed earlier would show that an election can be questioned under the statute as provided by Section 80 on the grounds as contained in Section 100 of the Act. Section 83 lays down a mandatory provision in providing that an election petition shall contain a concise statement of material facts and set forth full particulars of corrupt practice. The pleadings are regulated by Section 83 and it makes it obligatory on the election petitioner to give the requisite facts, details and particulars of each corrupt practice with exactitude. If the election petition fails to make out a ground under Section 100 of the Act it must fail at the threshold. Allegations of corrupt practice are in the nature of criminal charges, it is necessary that there should be no vagueness in the allegations so that the re turned candidate may know the case he has to meet. If the allegations are vague and general and the particulars of corrupt practice are not stated in the pleadings, the trial of the election petition cannot proceed for want of cause of action. The emphasis of law is to avoid a fishing and roving inquiry. It is therefore necessary for the Court to scruti nise the pleadings relating to corrupt practice in a strict manner. Now we would consider the various paragraphs of the election petition to determine as to whether the allegations contained therein disclosed any cause of action. The elec tion,petition runs into 58 paragraphs containing allegations of various corrupt practices known to the law. The averments contained in the various paragraphs are in disjointed form and in order to ascertain true intention of the election petitioner, one has to read several paragraphs and connect the same with the other to ascertain the correct import of the allegations. The allegations contained in paragraphs 1 to 7 contain narration of facts as to when the election took place and the petitioner 's desire to file his nomination paper by wearing only a "langot" and the obstruction raised by the authorities and the allegation that the police were 389 shadowing the appellant and two of them always kept company to him. These paragraphs do not make out any ground under Section 100 of the Act. In paragraph 8, the appellant al leged that on 5th, 6th and 10th June he saw a number of jeeps plying in the Parliamentary constituency of Amethi bearing flags of Congress (I) which were being used for electioneering purposes in support of Rajiv Gandhi. The allegations further state that the appellant noticed that food was being given to the workers of Rajiv Gandhi at the kothi of Sanjay Singh at Amethi. Assuming the allegations to be true, these do not make out any case of corrupt practice or any other ground of challenge under Section 100 of the Act. During the course of arguments the appellant urged that the allegations contained in paragraph 8 indicate that Rajiv Gandhi had been using a large number of vehicles and feeding workers and thereby he had been incurring expenses beyond the permissible limit. This inference is not permissible as each and every corrupt practice must be clearly and specifi cally pleaded and it should be complete in itself. No cor rupt practice can be inferred from reading one sentence here and the other sentence there. A corrupt practice as contem plated by Section 123(6) contemplates incurring or authoris ing expenditure beyond the prescribed limit. The allegations contained in paragraph 8 do not contain any averment that the respondent incurred or authorised expenditure beyond the prescribed limit. Neither any details of incurring expenses or authorising have been stated therein. Paragraph 9 of the petition stated that on 5th June 1981 the appellant had seen a number of cars mentioned therein carrying Congress (I) flags. Similarly, allegations contained in paragraphs 10, 11, 12, 13, 14, 15, 16, 17, 18 and 19 stated that on the dates mentioned in those paragraphs the election petitioner namely the appellant has seen a number of vehicles plying in the constituency carrying Congress (I) flags. These allega tions merely show that a number of vehicles were plying with Congress (I) flags in the constituency which by itself do not constitute any corrupt practice. It appears that the appellant intended that the returned candidate had spent money over the plying of vehicles and thereby he exceeded the limit prescribed by Section 123(6) read with Section 77 of the Act. In the absence of requisite allegations in the aforesaid paragraphs the basic ingredients to make out a ground for challenging the election under Section 100 of the Act was totally lacking. These paragraphs therefore dis closed no cause of action. In paragraphs 20 and 21 the appellant stated that Smt. Indira Gandhi toured the constituency along with the re spondent and in her speeches she appealed to the voters to vote for Rajiv Gandhi. We fail to appreciate how these allegations constitute any corrupt practice. It 390 is always open to a candidate or his supporter to appeal to the electors to vote for a particular candidate for the development and progress of the area. This would be a legit imate appeal and in any view, it could not constitute undue influence or any other corrupt practice. The appellant further stated that the Station Officer of Amethi took him in a jeep to Munshi Ganj crossing on the pretext that Smt. Indira Gandhi had given time to see the appellant but later on the Station Officer left him there. These allegations are wholly irrelevant. Allegations contained in paragraphs 22 to 26 relate to the relationship between the appellant and one Ram Pal Singh whom he had appointed his election agent. These allegations refer to matters which do not make out any ground under Section 100 of the Act. In paragraph 27 the appellant stated that he as well as his election agent both were being fol lowed by police but it does not refer to any violation of law or rule or commission of any electoral offence by the returned candidate or his workers with his consent. In paragraph 28 the appellant alleged that on the polling day a lady went to the polling booth along with a person, and the accompanying person affixed stamp on the ballot paper and returned with her. Even if that be so, we fail to understand as to how those facts would amount to any corrupt practice with consent of the returned candidate. Even assuming that this constitutes violation of provisions of the Act and the Rules framed thereunder, there is no pleading that it mate rially affected the result of the election. In fact the difference of votes between the petitioner and the returned candidate was of such great magnitude that there could be no question of election being materially affected on the basis of the aforesaid incident. In paragraph 29 the appellant stated that on the polling day drinking water and 'batashas ' were being distributed to the voters at the polling station in Amethi. There is no allegation that the water and bata shas were being distributed with the consent of Rajiv Gandhi or that he spent money over it or that the said action influenced the voters or that it materially affected the result of the election. In the absence of any such allega tions paragraph 29 disclosed no cause of action. Allegations contained in paragraphs 31 to 35 relate to alleged irregularities committed on the polling day. Accord ing to these allegations, workers of the respondent helped voters to cast their vote in favour of the respondent. The averments contained therein do not amount to any corrupt practice, instead if at all these allegations relate to irregularities and illegalities alleged to have been commit ted on the polling day which would at best be relevant if there was further allega 391 tion that it materially affected the result of the election. Since respondent 's term has already expired, and as his election cannot be set aside, these allegations do not survive and it is not necessary to consider them in detail. Similarly averments contained in paragraphs 3738 contain narration of facts which have no bearing on any corrupt practice. Allegations contained in paragraphs 39 to 49 relate to the appointment of counting agents. In substance the appellant has alleged that neither he nor his election agent had appointed any counting agents but a number of persons had acted as the appellant 's counting agents in an unauthorised manner and complaints made by him were not considered and the Returning Officer failed to perform his duty. These allegations even if assumed to be true do not make out any case of commission of corrupt practice. Allegations contained in paragraphs 50, 51 and 53 (1)(F) of the election petition purport to state that Rajiv Gandhi and his workers with his consent spent money on the election in excess of the ceiling limit and major portion of which was not shown by him in his election expenses return. It was alleged that in all Rs.3,15,500 had been spent by Rajiv Gandhi in his election but he did not include the same in his return. Details of the expenditure are mentioned in the sub paragraphs (a) to (g) of paragraph 50. In these para graphs the appellant alleged that Rajiv Gandhi used at least 100 jeeps for thirty days and his workers with his consent used 40 jeeps and spent money on propaganda badges, leaf lets, making arrangements for holding meetings for Smt. Indira Gandhi throughout the Amethi constituency and money was spent in providing food to 100 workers of Rajiv Gandhi, in all the returned candidate and his workers with his consent spent a sum of Rs.3,15,500 but the same was not accounted for in the election return. The allegations con tained in these paragraphs relate to the corrupt practice under Section 123(6) of the Act read with Section 77. Sec tion 123(6) provides that incurring or authorising of ex penditure in contravention of Section 77 is a corrupt prac tice. Section 77 lays down that every candidate at the election shall keep a correct and separate account of all expenditure in connection with the election incurred or authorised by him or by his election agent between the date of nomination and the date of declaration of result. The account shall contain such particulars as prescribed by Rules. Sub section (3) lays down that expenditure shall not exceed such amount as may be prescribed. Rule 90 of the Conduct of Election Rules, 1961 prescribed that the expenses shall not exceed a sum of Rs. 1 lakh for Lok Sabha election in the State of Uttar Pradesh. Section 77 and the Rules therefore prescribed a ceiling limit for election expenses and if any candidate incurs or 392 authorises expenses in excess of the ceiling limit, he would be guilty of corrupt practice under Section 123(6) of the Act. The allegations contained in various paragraphs of para 50 merely allege that a number of vehicles were plying with Congress (I) flags and food was served in connection with the election meetings, distribution of badges and leaflets. There is, however, no allegation that Rajiv Gandhi incurred or authorised incurring of expenditure for the aforesaid purposes. Any voluntary expense incurred by a political party, well wishers, sympathisers or association of persons does not fall within the mischief of Section 123(6) of the Act, instead only that expenditure which is incurred by the candidate himself or authorised by him is material for the purpose of Section 77. In Rananjaya Singh vs Baijnath Singh, ; this Court pointed out that expenses must be incurred or authorised by the candidate or his election agent. In that case the Manager, the Assistant Manager, 20 Ziladars and their peons were alleged to have worked for the election of the returned candidate. This Court held that the employment of extra persons and the incurring or authorising of extra expenditure was not by the candidate or his elec tion agent. It was further pointed out that persons who volunteer to work cannot be said to be employed or paid by the candidate or his election agent. In Smt. Indira Gandhi vs Raj Narain, Ray, C.J. observed "Authori sation means acceptance of the responsibility. Authorisation must precede the expenditure. Authorisation means reimburse ment by the candidate or election agent of the person who has been authorised by the candidate or by the election agent of the candidate to spend or incur. In order to con stitute authorisation the effect must be that the authority must carry with it the right of reimbursement. Section 77 requires a candidate to keep a separate and correct account of all expenditure "in connection with the election incurred or authorised by him or by his election agent" between the date of his nomination and the date of declaration of the result of the election. The candidate is required to maintain account of only that expenditure which he or his election agent may have authorised before the expenditure was actually incurred, which would imply that the candidate or his election agent undertook to reimburse the expenses which may have been authorised by him or his election agent to be spent at the election. In order to constitute a corrupt practice as contemplated by Sections 77 and 123(6) it is necessary to plead requisite facts showing authorisation, or undertaking of reimbursement by the candi date or his election agent. A mere vague and general state ment that the candidate and his workers with his consent spent money in election in 393 excess of the permissible ceiling would not be sufficient to constitute corrupt practice. In Kunwar Lal Gupta vs A.N. Chawla, this Court held that what Section 77(1) prescribed was not only the incurring but also the authorising of excessive expenditure and that such authorisation may be implied or express. The Court held that when a political party sponsor ing a candidate incurs expenditure in connection with his election as distinguished from expenditure on a general party propaganda, and the candidate knowingly takes advan tage of it or participates in the programme or activity or consents to it or acquiescence to it, it would be reasonable to infer that he impliedly authorised the political party to incur such expenditure and he could not escape the rigour of the ceiling by saying that he had not incurred the expendi ture and the political party had done so. The result of the judgment was that the expenditure incurred by political party in connection with the general party propaganda was deemed to have been incurred by the candidate himself. The Parliament amended Section 77 by the Representation of the People (Amendment) Act, 1974 by adding two explanations to the Section. Explanation 1 lays down that any expenditure incurred or authorised in connection with the election of a candidate by a political party or by any association or body of persons or by any individual other than the candidate or his election agent, shall not be deemed to be incurred or authorised by the candidate or his election agent. The validity of the Amending Act was upheld by a Constitution Bench of this Court in Dr. P. Nalla Thampy Terah vs Union of India & Ors., [1985] Supp. SCC 189. After the amendment of Section 77(1) any expenditure at the election by a political party, sympathisers or friends cannot be held to have been incurred by the candidate or his election agent unless it is shown that the money which they spent belonged to the candi date or his election agent or that he reimbursed the same. it is thus evident that unless the allegations are specific that the candidate or his election agent authorised the expenses before the money was actually spent and that the candidate or his election agent reimbursed or undertook to reimburse the same the necessary ingredient of corrupt practice would not be complete and it would provide no cause of action to plead corrupt practice. In the instant case paragraph 50 and its various sub paragraphs contain mere assertion of facts relating to expenditure but there is no allegation that the expenditure was incurred or authorised by Rajiv Gandhi or that he undertook to reimburse the same. The appellant made an attempt to jumble up various allega tions regarding incurring of expenditure by the returned candidate and his workers. The allegations 394 contained therein do not make out any case of corrupt prac tice and the High Court was justified in striking out the same. Allegations contained in paragraph 52 disclose that the appellant had come to know that the villages in the constit uency of Amethi, Rajiv Gandhi polled cent percent votes in his favour. This statement does not make out any corrupt practice or any ground of challenge under Section 100 of the Act, it was rightly struk off by the High Court. Paragraph 53 of the election petition stated that Rajiv Gandhi committed corrupt practice as set out in sub para graphs (A) to (F). These paragraphs are under the heading of "Grounds". It appears the appellant intended to challenge the election of the returned candidate on the grounds men tioned in various sub paragraphs of paragraph 53, it is therefore necessary to consider the allegations contained in each of the sub paragraphs to ascertain as to whether any corrupt practice was pleaded which could disclose cause of action to maintain the petition. Paragraph 53(1)(a) stated that Rajiv Gandhi "tried to make gift" to the voters in the following manner to make them vote in his favour which is illegal under Section 123(1)(A) of the Representation of the People Act. After making this general statement the appel lant stated that on 15th June 1981 prior to the declaration of election and also during the election period workers of Rajiv Gandhi with his consent speeded up the construction work of Amethi Railway Station, and this was done only to persuade the voters to cast their vote in his favour. This was a gift to the voters of the constituency. Besides that certain other works were also done which fall within the definition of gift to the voters of the constituency. The petition does not disclose any material fact or particular regarding the alleged corrupt practice of making gift which may amount to bribery within the meaning of Section 123(1)(A) of the Act. The allegations merely disclose that Amethi Railway Station was being constructed and during the election its work was speeded up which persuaded the voters to cast their vote in favour of the returned candidate. There is no allegation that Rajiv Gandhi or his workers with his consent made any gift, offer or promise to any elector to vote or refrain from voting at an election. If some developmental activity was carried on in the constituency and if it was completed during the election period it could not amount to any gift or promise to the voters. It would be noticed that the allegations contained in sub paragraph 53(1)(A) open with the qualification "Respond ent No. I (Rajiv Gandhi) tried to make gift to the voters," which means that attempt was 395 made to make gift to the voters and not that it was actually done. It indicates that the appellant who made the allega tions was himself not sure that any corrupt practice had been committed. Sub paragraphs (A) and (C) of paragraph 53 (I) of the election petition alleged that Rajiv Gandhi and Smt. Indira Gandhi and their workers with the consent of Rajiv Gandhi and Smt. Indira Gandhi made promise through newspapers, pamphlets and speeches that voters should cast their vote in favour of Rajiv Gandhi for the development of Amethi because his victory will ensure progress and develop ment. Further Rajiv Gandhi and Smt. Indira Gandhi and the workers of Rajiv Gandhi in all their speeches and particu larly Smt. Indira Gandhi in her speech of 11.6.1981 said that for the development of Amethi Constituency they should vote for Rajiv Gandhi. On account of these speeches voters could not cast their vote impartially, instead they cast their vote in favour of Rajiv Gandhi. Since Rajiv Gandhi and Smt. Indira Gandhi both attended the meetings together voters got the impression that as Smt. Indira Gandhi was Prime Minister and her son Rajiv Gandhi was a candidate, there was bound to be development of Amethi area if Rajiv Gandhi was elected. These allegations merely amount to representation being made by Smt. Indira Gandhi and the returned candidate and his workers that if Rajiv Gandhi was elected the constituency would be developed. Such a state ment of promise is a legitimate one and it does not fail within the definition of bribery or undue influence under Section 123(1)(A) or 123 (2) of the Act. A candidate, his workers and supporters have every right under the law to canvass for the success of a particular candidate saying that if elected he would work for the development of the constituency. Such a promise does not in any way interfere with the free exercise of electoral right of the electors. Indira Gandhi who was the leader of the party was entitled to ask the electors to vote for Rajiv Gandhi and the fact that she was the Prime Minister made no difference to her to make an appeal of that nature. There is no allega tion that there was any element of bargaining or undue influence in making appeal to the voters for casting their vote in favour of Rajiv Gandhi. Section 123(2)(b) itself provides that a declaration of public policy, or a promise of public action or the mere exercise of a legal right without intent to interfere with the electoral right shall not be deemed to be interference with the exercise of elec toral right. In Shiv Kirpal Singh vs V.V. Gin, , a Constitution Bench of this Court held that the expression "free exercise of the electoral right" does not mean that voter is not to be influenced. This expression has to be read in the context of an election in a democratic 396 society and the candidates and their supporters must natu rally be allowed to canvass support by all legitimate and legal means. This exercise of the right by a candidate or his supporters to canvass support does not interfere or attempt to interfere with the free exercise of the electoral right. What does amount to interference with the exercise of an electoral right is "tyranny over the mind". Declaration of public policy or a promise of public action or promise to develop the constituency in general do not interfere with free exercise of electoral rights as the same do not consti tute bribery or undue influence. In H.V. Karnath vs Ch. Nitiraj Singh; , the State Government during the election period issued an Ordinance granting exemption to certain agriculturists from payment of land revenue and during the election the Chief Minister announced increased dearness allowance to Government employees. Referring to these facts the election petitioner therein alleged that the same amounted to corrupt practice under Section 123(1)(A) of this Act. This Court repelled the contention and held that the Ordinance did not amount to a gift, offer or promise of any gratification within the meaning of Section 123(1)(A). Similarly, increase in dearness allowance could not be regarded as a gift, offer or promise of any gratification within the meaning of Section 123(1)(A). A general promise made by the Prime Minister or Minister to redress public grievance or to provide for public amenities for developing the constituency if elected, does not amount to corrupt practice. In paragraph 53(1)(B) and (C) material facts relating to alleged "gift and promise and undue influence" have not been stated in the petition and for that reason also paragraphs 53(1)(B) and (C) were righlty struck off. Paragraph 53(1)(D) stated "the workers of Rajiv Gandhi with his consent on 14th June 1981 at about 2 p.m. tried to bring voters in truck for casting votes and dropped them back at their houses. The appellant noted the number of such truck which is mentioned in the paragraph. This truck had brought about 20 22 voters to the Junior High School Polling Centre of Amethi constituency and took them back without charging fare from them. The truck was used by Rajiv Gandhi and this amounted to corrupt practice. This paragraph con tains substantially the same allegations as contained in paragraph 30 of the petition, it purports to convey that Rajiv Gandhi and with his consent his workers "tried to bring voters". In substance the allegation amounts to saying that Rajiv Gandhi and his workers made attempt to carry voters in a truck. He further alleged that they carried the voters. It appears that the appellant intended to lay charge of corrupt practice against Rajiv Gandhi under Section 123(5) of the Act for hiring or procuring of a 397 truck for the use of same for free conveyance of electors to and from the polling station. The necessary particulars with regard to corrupt practice as contemplated by Section 123(5) are however, totally lacking. The petition does not contain any material facts with regard to hiring or procuring of the vehicle. Further there is no allegation as to when the vehicle was hired or procured, by whom, and at what place or that the said vehicle in furtherance of hiring or procuring was used for free conveyance of electors to and from polling station. The allegations made in paragraphs 30 and sub paragraph (D) of paragraph 53(1) merely show that some voters were brought to the polling station Amethi in a truck without charging any fare from them and the truck was used by the workers of Rajiv Gandhi. Does this make out a corrupt practice under Section 123(5)? Section 123(5) reads as under: "The hiring or procuring, whether on payment or otherwise, of any vehicle or vessel by a candidate or his agent or by any other person (with the consent of a candidate or his elec tion agent) (or the use of such vehicle or vessel for the free conveyance) of any elector (other than the candidate himself, the members of his family or his agent) to or from any polling station provided under Section 25 or a place fixed under sub section (1) of Section 29 for the poll . . " It would be noticed that hiring or procuring of a vehicle by a candidate or his agent or by any other person with his consent is the first essential ingredient of the corrupt practice, the second essential ingredient is that the hiring or procuring of the vehicle must be for conveyance of the voters to and from the polling station and the third neces sary ingredient is that conveyance of electors is free from any charge. All the three ingredients must be pleaded to make out a case of corrupt practice under Section 123(5). If any of the three ingredients is not pleaded there would be no pleading of corrupt practice. In Joshbhai Chunnibhai Patel vs Anwar Beg A. Mirza, ; Hidayatullah, C.J. speaking for the Court analysed this Section and ob served: "it will therefore, appear that the Section requires three things, (i) hiring or procuring of a vehicle; (ii) by a candidate or his agent etc, and (iii) for the free convey ance of an elector. It will be noticed that the Section also speaks of the use but it speaks of the use of such vehicle which connects the two parts, namely, hiring or procuring of vehicle and its use. The requirement of the law therefore is that in addition to proving the hiring or procuring and the carriage of electors to and from any polling station, should also be proved that the electors used the vehicle free of cost to themselves." In Ch. Razik Ram vs Ch. J.S. 398 Chouhan & Ors. , the Court considered the decision of this Court in Balwan Singh vs Lakshmi Narain, [2960] 3 SCR 91 and the effect of 1966 amendment and there upon it held as under: "On analysis, clause 5 of Section 12* fails into two parts. The requirements of the first part are: (i) the hiring or procuring whether on payment or otherwise, of any vehicle or vessel for the free conveyance of voters, (ii) such hiring or procuring must be by a candi date or his election agent or by any other person with the consent of a candidate or of his election agent. The second part envisages the "use of such vehicle or vessel for the free conveyance of any elector (other than the candidate himself, the members of his family, or his election agent) to or from any polling station. " The two parts are connected by the conjunction "or" which is capable of two constructions. In one sense it is a particle coordinating the two parts of the clause and creating an alternative between them. In the other sense which is akin to the sense of "and" it can be construed as conjoining and combining the first part of the clause with the second. The latter construction appears to comport better with the aim and object of the amendment of 1966. In this connection, it is noteworthy that even before the amendment, this Court in Shri Balwan Singh vs Lakshmi Narain, ; held that in consider ing whether a corrupt practice described in Section 123(5) is committed, conveying of electors cannot be dissociated from the hiring of a vehicle. Even if the word "or" is understood as a coordinating conjunction introducing alterna tives, then also a petitioner in order to succeed on the ground of a corrupt practice under the second part of the clause, must prove in addition to the use of the vehicle or vessel for the free conveyance of any elector to or from any polling station, the hiring or procuring of that vehicle or vessel. This is so because the word "such" in the phrase introduced by the 1966 amendment, expressly imports these elements of the first into the second part of the clause. " Same view was taken by this Court in Dadasaheb Dattatraya Pawar & Ors. vs Pandurang Raoji Jagtap & Ors., ; and the Court emphasised that it was necessary for an election petitioner to 399 prove (i) that any vehicle or vessel was hired or procured, whether on payment or otherwise, by the returned candidate or by his election agent or by any other person with the consent of the candidate or of his election agent; (ii) that it was used for the conveyance of the electors to or from any polling station, and (iii) that such conveyance was free of cost to the electors. Failure to substantiate any one of these ingredients leads to the collapse of the whole charge. Standard of proof required to establish a corrupt practice is strict, as imputation of corrupt practices is quasi criminal and the charge of corrupt practice under Section 123(5) has to be scrutinised in a strict manner. In Dharmesh Prasad Verma vs FaiyazaI Azam, ; this Court again reaffirmed the aforesaid view. There is thus good authority for holding that if any of the three ingredients as noted earlier is not pleaded the charge of corrupt prac tice must fail. In the absence of any of the three ingredi ents being pleaded it would not be open to the election petitioner to adduce evidence to sustain the charge of corrupt practice as was held by this Court in Rajendra Singh Yadav vs Chandra Sen & Ors. , AIR 1979 SC 882. The appellant placed strong reliance on the decision of this Court in Balwan Singh vs Lakshmi Narain. This case was decided prior to the amendment of Section 123(5) but even in that case this Court observed that the corrupt practice under Section 123(5) being the hiring or procuring of a vehicle for the conveyance of the electors, full statement of the hiring or procuring must be given by the election petitioner. Balwan Singh 's case was considered and discussed in Ch. Razik Ram vs Ch. J.S. Chouhan & Ors. The appellant then placed reliance on the observations of this Court in Balwan Singh vs Prakash Chand & Ors., ; We have persued the decision but we do not find any support for the appellant 's contention that the pleadings contained in paragraphs 30 and 53(1)(D) are sufficient to constitute charge of corrupt practice. In Balwan Singh vs Prakash Chand & Ors., this Court interpreted the word "procure" to mean "to obtain, as by request, loan, effort, labour, or pur chase, get, gain, come into possession of". Thus the hiring of a vehicle must be to procure the same for the purpose of conveyance of the voters free of cost. The hiring and pro curing the vehicle is a necessary ingredient which must be pleaded before the charge can be tried. The allegations contained in paragraphs 30 and 53(1)(D) conspicuously do no contain any pleading regarding hiring and procuring of the vehicles by Rajiv Gandhi or any of his worker with his consent for conveyance of the voters to and from polling station free of cost. No particulars of any kind have been specified in the paragraphs under consideration. The para graphs as 400 they stand do not make out any charge of corrupt practice as contemplated by Section 123(5) of the Act and the High Court was therefore justified in striking out the same. In paragraph 53(1) (E) of the election petition the appellant stated "that as per Section 123(7) of the Repre sentation of the People Act, Rajiv Gandhi 's workers with his consent took help from the Government officers and high police officers and people of Government departments for securing votes of the electors. These officials flouted all rules and laws particulars of which are as under. " Thereaf ter particulars of the help taken from the Government offi cers are detailed in sub paragraphs (I) to (8). A corrupt practice as contemplated by Section 123(7) contemplates obtaining or procuring by a candidate or his election agent, assistance from the Government servants belonging to the classes specified in sub section (7) of Section 123 for the furtherance of the prospect of the candidate 's election. In order to constitute a corrupt practice under Section 123(7), it is essential to clothe the petition with a cause of action which would call for an answer from the returned candidate and it should therefore plead mode of assistance, measure of assistance and all facts pertaining to the as sistance. The pleading should further indicate the kind or form of assistance obtained and in what manner the assist ance was obtained or procured or attempted to be procured by the candidate for promoting the prospect for his election. The election petitioner must state with exactness the time of assistance, the manner of assistance and the persons from whom assistance was obtained or procured by the candidate as held by this Court in Hardware Lal vs Kanwal Singh, and Azhar Hussain vs Rajiv Gandhi. Allegations contained in subparagraphs 1, 2 and 3 of the paragraph 53(1) (E) raise a grievance that though the appellant had not appointed any counting agent but still certain persons acted as his counting agents and the Returning Officer did not hold any inquiry into his complaint. Sub paragraph 4 states that in the Amethi Constituency, there was fear psychosis and "it looked as if the police and other Government offi cials wanted to help Rajiv Gandhi". Sub paragraphs 5 to 8 refer to certain illegalities and irregularities alleged to have been committed by certain persons on the polling day in helping voters to cast their votes and it further alleged that some persons cast votes 100 to 200 times and their signatures were not obtained. These allegations do not make out any charge of corrupt practice within the provisions of Section 123 (7) of the Act; As regards paragraph 53(1)(G) it purports to allege a corrupt practice under Section 123(6) of the Act on the ground that Rajiv Gandhi spent Rs.3, 15,500 in excess of the amount permitted under the law. We have 401 already discussed this matter earlier. Paragraph 53(2) of the petition is as under: "That Presiding Officer is duty bound under Sections 27, 28 and 139 of the Representation of the People Act to ensure that the polling is fair, but it has not been so in this case. According to the rules, the Presiding Officer should have not removed the posters and other propaganda material from the polling booth. But the hand symbol was being displayed by every Presiding Officer, and other persons and the agents of the candidates and voters. By reason of this, the voters were influenced and Rajiv Gandhi got very many votes. The hand symbol influenced the voters to a great extent because Rajiv Gandhi 's workers were trying to display the hand symbol in the polling booth as well as within 100 meters of the polling booth. The hand symbol was visible to every voter everywhere. This influenced the voters very much and they cast votes in favour of Rajiv Gandhi. " The aforesaid allegations do not amount to any corrupt practice as contemplated by Section 123 of the Act. At best these allegations raise a grievance that the Presiding Officers did not perform their duties in accordance with law in as much as they failed in their duty to remove the post ers and other propaganda material from the polling booth and the hand which was the election symbol of Rajiv Gandhi and the same was displayed within 100 meters of the polling booth in violation of the rules. The allegations do not make out any charge of corrupt practice. If at all the allega tions could be a ground under Section 100(1)(d)(iv) of the Act for setting aside election on the ground of its being materially affected but no such plea was raised. Paragraphs 54 to 58 do not deal with any corrupt practice. The above scanning of the election petition would show that the appellant failed to plead complete details of corrupt practice which could constitute a cause of action as contemplated by Section 100 of the Act and he further failed to give the material facts and other details of the alleged corrupt practices. The allegations relating to corrupt practice, even if assumed to be true as stated in the var ious paragraphs of the election petition do not constitute any corrupt practice. The petition was drafted in a highly vague and general manner. Various paragraphs of the petition presented disjointed averments and it is 402 difficult to make out as to what actually the petitioner intended to plead. At the conclusion of hearing of the appeal before us appellant made applications for amending the election petition, to remove the defects pointed out by the High Court and to render the allegations of corrupt practice in accordance with the provisions of Section 83 read with Section 123 of the Act. Having given our anxious consideration to the amendment applications, we are of the opinion that these applications cannot be allowed at this stage. It must be borne in mind that the election petition was presented to the Registrar of the High Court, at Lucknow Bench on the last day of the limitation prescribed for filing the election petition. The appellant could not raise any ground of challenge after the expiry of limitation. Order VI Rule 17 no doubt permits amendment of an election petition but the same is subject to the provisions of the Act. Section 81 prescribes a period of 45 days from the date of the election for presenting election petition calling in question the election of a returned candidate. After the expiry of that period no election petition is maintainable and the High Court or this Court has no jurisdiction to extend the period of limitation. An order of amendment permitting a new ground to be raised beyond the time speci fied in Section 81 would amount to contravention of those provisions. and is beyond the ambit of Section 87 of the Act. It necessarily follow that a new ground cannot be raised or inserted in an election petition by way of amend ment after the expiry of the period of limitation. The amendments claimed by the appellant are not in the nature of supplying particulars instead those seek to raise new grounds of challenge. Various paragraphs of the election petition which are sought to be amended, do not disclose any cause of action, therefore it is not permissible to allow their amendment after expiry of the period of limitation. Amendment applications are accordingly rejected. Before we close we would like to express our anxiety on a feature which of late has assumed great proportion. In Parliamentary form of democracy political parties play vital role and occassionally they sponsor candidates for the election. But under the existing law it is open to any elector to contest election from any parliamentary constitu ency in the country and it is not necessary that the candi date should be sponsored by a political party. It is permis sible for an elector to contest election on his own as an independent candidate. Some independent individuals contest election genuinely and some of them have succeeded also but experience has shown that a large number of independent candidates contest the election for the mere sake of con testing, with a view to make out grounds for challenging the election. Presence of a number of independent candidates results in confusion, for the millions of the illiterate and ignorant electors who exercise 403 their electoral right on the basis of 'symbols ' printed on the ballot papers. The presence of large number of independ ent candidates makes the ballot paper of unmanageable size and ordinary elector is confused in the election booth while exercising his franchise. This leads to confusion. In the instant case out of 14 candidates who contested the election 11 of them including the appellant contested as independent candidates and they all polled only paltry number of votes. This shows the genuineness of the candidature of independent candidates. The appellant is a resident of Gwalior in Madhya Pradesh and he is a lawyer by profession. He contested election as an independent candidate and on the date of filing of nomination paper he insisted to file his nomina tion paper by stripping off himself completely and by put ting on only a 'langot '. This caused consternation in the office of the Re . turning Officer, and it has also been raised as a ground of attack in the election petition. In fact the appellant has filed certain photographs before us showing himself in a 'langot ' only. When this appeal came up for hearing before us the appellant insisted that he should be allowed to argue the case by putting on a crown (an artificial one) on his head. According to him without the crown he would not be able to make his submissions in a satisfactory manner. We refused to grant the permission to the great dissatisfaction of the appellant. A court of law is a solemn place where proceedings are held in a solemn manner and the time of the court especially in the apex court is precious. time which belongs to the people and it would be wholly abnoxious to judicial propriety to allow a litigant to appear in court wearing a crown to argue the case. The court cannot be converted into a dramatic or theatrical stage. We accordingly refused to grant the per mission to the appellant to wear his crown. During the arguments the appellant glibly stated that he had contested the election for the offices of President and Vice President and that he would be contesting each and every election as an independent candidate with a view to reform the society and the election law. This is not uncommon as a number of other persons have been contesting elections as independent candidates for the high office and some of them filed elec tion petition disputing the election. These factors have given cause for anxiety to us and we hope that the Parlia ment will take these matters into consideration to devise ways and means to meet the on slaught of independent candi dates who are not quite serious about their business. In view of our discussion, we are of the opinion that the High Court rightly exercised its power in rejecting this petition under Order VII Rule 11. The appeal fails and accordingly dismissed with costs which we quantify at Rs.2,000. P.S.S. Appeal dismissed.

The election of the respondent, who was returned to the Lok Sabha in a bye election in 1981, was challenged by the appellant under section 80 of the Representation of the People Act, 1951, on a number of grounds, including the allegations of corrupt practice of undue influence, hiring and procuring of vehicles for carrying voters and obtaining the assistance of Government servants and incurring expenses at the elec tion in excess of the permissible limit. Upon a preliminary objection raised by the respondent the High Court struck off the pleadings as vague, general, unnecessary, frivolous and vexatious within the meaning of Order VI Rule 16 of the Code of Civil Procedure and rejected the petition under Order VII Rule 11 read with section 87 of the Act on the ground that it did not disclose any cause of action. In the appeal under section 116 A of the Act against the order of the High Court, it was contended for the appellant that the High Court had no jurisdiction to entertain prelim inary objections under Order VI Rule 16 or to reject the election petition under Order VII Rule 11 of the Code before the respondent had filed his written statement to the peti tion, which deprived him of the opportunity of amending the petition by supplying material facts and particulars, that allegations contained in various paragraphs of the petition constituted corrupt practices which disclosed cause of action within the meaning of section 100 of the Act and the High Court committed error in holding that the petition was detective, on the premise that it did not disclose any triable issue, and that the election petition disclosed primary facts regarding corrupt practice and 370 if there was absence of any particulars or details the High Court should have afforded opportunity to the appellant to amend the petition. The respondent was subsequently returned to the Lok Sabha in the general election held in 1984 and the validity of that election has been upheld in Azhar Hussain vs Rajiv Gandhi, ; and Bhagwati Prasad vs Rajiv Gandhi, ; The relief of setting aside the impugned election had thus become infructuous by lapse of time as the subsequent election could not be set aside on the grounds raised in the petition. But since section 98 read with section 99 of the Act mandates investigation of charges of corrupt practice, if any, raised against the returned candi date, and as proof thereof entails incurring of disqualifi cation from contesting subsequent election for a period of six years, the Court heard the appeal at length. On the questions: Whether the High Court had jurisdic tion to strike out pleadings under Order VI Rule 16 of the Code of Civil Procedure and to reject an election petition under Order VII Rule 11 of that Code at the preliminary stage, even though no written statement had been filed by the respondent, whether in the instant case in entertaining the preliminary objections and rejecting the election peti tion the High Court deprived the appellant of an opportunity to amend the petition and to make good the deficiencies by supplying necessary particulars and details of the corrupt practices alleged in the petition, and whether the various paragraphs of the said election petition disclosed any cause of action. Dismissing the appeal, HELD: 1.1 Right to contest election or to question the election by means of an election petition is neither common law nor fundamental right, instead it is a statutory right regulated by the statutory provisions of the Representation of the People Act, 1951, which is a complete and self con tained Code. Outside the statutory provisions, there is no right to dispute an election. The provisions of the Civil Procedure Code are applicable to the extent as permissible by section 87 of the Act. [387H 388B] 1.2. The scheme of the Act shows that an election can be questioned under the statute as provided by section 80 on the grounds as contained in section 100. The pleadings are regulated by section 83, which lays down a mandatory provision in providing that an election petition shall contain a COncise statement of material facts and set forth full particulars of 371 corrupt practices with exactitude. [388C] 1.3 Since allegations of corrupt practice are in the nature of criminal charges, it is necessary that each and every corrupt practice must be clearly and specifically pleaded and it should be complete in itself so that the returned candidate may know the case he has to meet. If the allegations are vague and general and the particulars of corrupt practice are not stated in the pleadings the trial of the election petition cannot proceed for want of cause of action. [388DE] N.P. Ponnuswami vs Returning Officer, ; ; Jagan Nath vs Jaswant Singh, ; and Jyoti Basu vs Debi Ghosal, ; , referred to. 2.1 A combined reading of sections 81, 83, 86 and 87 of the Act makes it apparent that an election petition is liable to be dismissed in limine at the initial stage if it does not disclose any cause of action. Cause of action in questioning the validity of election must relate to the grounds speci fied in section 100 of the Act. If the allegations contained in the petition do not set out grounds of challenge as contem plated by section 100 and if the allegations do not conform to the requirement of sections 81 and 83 the pleadings are liable to be struck off under Order VI Rule 16 of the Code of Civil Procedure. If after striking out defective pleadings the Court finds that no cause of action remains to be tried it would be duty bound to reject the petition under Order VII Rule 11 of the Code. [382H, 386A C] Azhar Hussain vs Rajiv Gandhi, ; ; Bhag watii Prasad vs Rajiv Gandhi, ; ; Udhav Singh vs Madhay Rao Scindia, ; and Charan Lal Sahu to. 2.2 In the instant case, the appellant failed to plead complete details of corrupt practices which could constitute a cause of action as contemplated by section 100 of the Act. He also failed to give the material facts and other details of the alleged corrupt practices. The High Court, therefore, rightly exercised its power in rejecting the election peti tion under Order VII Rule 11 of the Code. [401G, 403G H] 3. I Order VI Rule 16 of the Civil Procedure Code per mits striking out of pleadings which are unnecessary, scan dalous, frivolous, or vexatious or which may tend to preju dice, embarrass or delay a fair trial at any stage of the proceedings. It does not admit of any exception that the respondent must file written statement before the 372 preliminary objections could be entertained. If, therefore, a preliminary objection is raised before commencement of the trial, the court is duty bound to consider the same. It need not wait for the filing of the written statement by the defendant and point out defects. Instead it can proceed to hear the preliminary objection and strike out the pleadings. [387BC, 386D, 383AB, CD] 3.2. The High Court, therefore, had jurisdiction in the instant case to strike out pleadings at the preliminary stage even though no written statement had been filed by the respondent. [382CD] K. Kamaraja Nadar vs Kunju Thevar & Ors., , referred to. Union of India vs Surjit Singh Atwal, ; , distinguished. Vidya Charan Shukla vs G.P. Tiwari & Ors., AIR 1963 MP 356 overruled. 4.1 The Court did not deprive the appellant of the opportunity to amend the petition and to make good the deficiencies by supplying the necessary particulars and details of the corrupt practices alleged in the petition. He was free to file amendment application, but at no stage did he express any desire to make any amendment application nor he made any application to that effect before the High Court. It was open to him to have made that application but he himself did not make any such application. [387DE] 4.2 The High Court was under no legal obligation to direct the appellant to amend pleadings or to suo moto grant time for the same. Moreover, the allegations of corrupt practice as required by Section 83 were not complete and did not furnish any cause of action. [387E] 5.1 The petition was drafted in a highly vague and general manner. Various paragraphs of the petition presented disjointed averments and it is difficult to make out as to what actually the petitioner intended to plead. [401H] 5.2 The allegations contained in paragraphs 1 to 7 contain narration of facts as to when the election took place and the petitioner 's desire to file his nomination paper and the obstruction raised by the authorities and the allegation that the police were shadowing the appellant do not make out any ground under section 100 of the Act. [388H] 5.3 The allegation in para 8 that food was given to the workers of the respondent at some places assuming to be true does not make out a 373 case of corrupt practice or any other ground of challenge under section 100 of the Act. A corrupt practice as contemplated by section 123(6) contemplates incurring or authorising expendi ture beyond the prescribed limit. The impugned allegation does not contain any averment that the respondent incurred or authorised expenditure beyond the prescribed limit. [389B D] 5.4 Paras 9 to 19 merely show that a number of vehicles were plying with party flags of the respondent in the con stituency on different dates which by itself do not consti tute any corrupt practice. The basic ingredients to make out a ground for challenging the election under section 100 of the Act in these paras were totally lacking. They, therefore, disclosed no cause of action. [389E G] 5.5 The allegations in paras 20 and 21 that the mother of the returned candidate, who was the Prime Minister, had toured the constituency alongwith him and in her speeches had appealed to the voters to vote for him do not constitute undue influence or any other corrupt practice. It is always open to a candidate or his supporters to appeal to the electors to vote for a particular candidate for the develop ment and progress of the area. This would be a legitimate appeal, [389H 390A] 5.6 The allegations in paras 22 to 26 of the petition relate to the relationship of the appellant with his agent. These do not make out any ground under section 100 of the Act. [390BC] 5.7 The statement in para 27 that the appellant as we11 as his election agent were being followed by police does not refer to any violation of law or rule or commission of any electoral offence by the returned candidate or his workers with his consent. [390C] 5.8 The allegation in para 28 that on the polling day a lady went to the polling booth alongwith a voter where he affixed stamp on ballot paper and returned with her does not amount to any corrupt practice with consent of the returned candidate unless it could be shown that it materially af fected the result of the election. [390D] 5.9 The allegation in para 29 that on the polling day drinking water and batashas were being distributed to the voters at the polling station does not show that it was being done with the consent of the respondent or that he spent money over it or that the said action influenced the voters or that it materially affected the result of the election. In the absence of such allegations it disclosed no cause of action. [390F] 374 5.10 The allegations in paras 31 to 35 that workers of the respondent helped voters to cast their votes in favour of the respondent, do not amount to any corrupt practice unless there was further allegation that it materially affected the result of the election. [390G] 5.11 The averments made in paras 37 and 38 contain narration of facts which have no bearing on any corrupt practice. [391A] 5.12 The allegations in paras 39 to 49 that neither the appellant nor his election agent had appointed any counting agents but a number of persons had acted as his counting agents in an unauthorised manner and that complaints made by him were not considered by the Returning Officer, even if assumed to be true do not make out any case of commission of corrupt practice. [391B] The High Court, was, therefore, justified in striking out all these paragraphs. 6.1 In order to constitute a corrupt practice as contem plated by sections 77 and 123(6) it is necessary to plead requi site facts showing authorisation or undertaking of reim bursement by the candidate or his election agent. A mere vague and general statement that the candidate and his workers with his consent spent money in election in excess of the permissible ceiling would not be sufficient to con stitute corrupt practice. [392G 393A] Rananjaya Singh vs Baijnath Singh, ; ; Smt. Indira Gandhi vs RaI Narain, and Kunwar Lal Gupta vs A.N Chawla, , referred to. 6.2 Any voluntary expense incurred by a political party, well wishers, sympathisers or association of persons does not fail within the mischief of section 123(6), instead only that expenditure which is incurred by the candidate himself or authorised by him is material for the purpose ors. [392B] Dr. P. Nalla Thampy Terah vs Union of India & Ors., [1985] Supp. SCC 189, referred to. 6.3 The allegations contained in various sub paras of para 50 merely allege that a number of vehicles were plying with the flags of the party to which the returned candidate belonged and food was served in connection with the election meetings, distribution of badges and 375 leaflets. There is no allegation that the returned candidate incurred or authorised incurring of expenditure for the aforesaid purposes. Unless the allegations are specific that the candidate or his election agent authorised the expenses before the money was actually spent and that the candidate or his election agent reimbursed or undertook to reimburse the same the necessary ingredient of corrupt practice would not be complete and it would provide no cause of action to plead corrupt practice. The High Court was justified in striking out the same. [393G 394A] 7.1 If some developmental activity was carried on in the constituency and if it was completed during the election period it could not amount to any gift or promise to the voters. [394G] 7.2 The allegation in para 53(1)(A) does not disclose any material fact or particular regarding the alleged cor rupt practice of making gift which may amount to bribery within the meaning of section 123(1)(A). It merely states that Amethi railway station was being constructed and during the election its work was speeded up which persuaded the voters to cast their votes in favour of the returned candidate. There is no allegation that ,he returned candidate or his workers with his consent made any gift, offer or promise to any elector to vote or refrain from voting at an election. [394EF] 8.1 A candidate, his workers and supporters have every right under the law to canvass for the success of a particu lar candidate saying that if elected he would work for the development of the constituency. Such a promise does not in any way interfere with the free exercise of electoral right of the electors. [395E] 8.2 The allegations in paras 53(1)(B) and (C) that the returned candidate, his mother and their workers with their consent made promise through newspapers, pamphlets and speeches that voters should cast their votes in favour of the respondent for the sake of progress and development of the constituency, merely amounts to a representation being made by the party leader and the returned candidate and his workers. Such a statement of promise is a legitimate one and it does not fail within the definition of bribery and undue influence under section 123(1)(A) or section 123(2). [395B, D] 8.3 Declaration of public policy or a promise of public action or promise to develop the constituency in general do not interfere with free exercise of electoral rights as the same do not constitute bribery or undue influence. [396B] 376 Shiv Kirpal Singh vs V.V. Giri, [1971] 2 SCR 197 and H.V. Kamath vs Ch. Nitiraj singh; , , referred to. 9.1 Hiring or procuring of a vehicle by a candidate or his agent or by any other person with his consent is the first essential ingredient of the corrupt practice under section 123(5), the second such ingredient is that the hiring or procuring of the vehicle must be for conveyance of the voters to and from the polling station, and the third that conveyance of electors is free from any charge. If any of the three ingredients is not pleaded to make out a case of corrupt practice under section 123(5) the charge must fail. [397E, 399C] 9.2 The allegations contained in para 30 and 53(1)(D) conspicuously do not contain any pleading regarding hiring and procuring of the vehicles by the returned candidate or any of his workers with his consent for conveyance of the voters to and from polling station free of cost. No particu lars of any kind have been ' specified. The paras, therefore, do not make out any charge of corrupt practice as contem plated by section 123(5) and the High Court was justified in striking out the same. [399G 400A] Joshbhai Chunnibhai Patel vs Anwar Beg A. Mirza, ; ; Ch. Razik Ram vs Ch. J.S. Chouhan & Ors., ; Balwant Singh vs Lakshmi Narain, ; ; Dadasaheb Dattatraya Pawar & Ors. vs Pandurang Raoji Jagtap & Ors., ; ; Dharmesh Prasad Verma vs Faiyazal Azam, ; ; Rajendra Singh Yadav vs Chandra Sen & Ors., AIR 1979 SC 882 and Balwan Singh vs Prakash Chand & Ors., ; , referred to. 10.1 In order to constitute a corrupt practice under section 123(7), it is essential to clothe the petition with a cause of action which would call for an answer from the returned candidate and it should, therefore, plead mode of assist ance, measure of assistance and all facts pertaining to the assistance. The pleading should further indicate the kind or form of assistance obtained and in what manner the assist ance was obtained or procured or attempted to be procured by the candidate. for promoting the prospect of his election. The petitioner must state with exactness the time of assist ance, the manner of assistance and the persons from whom assistance was obtained or procured by the candidate. [400DE] 10.2 The allegations in sub paras 1, 2 and 3 of para 53(1)(E) that though the appellant had not appointed any counting agent but still 377 certain persons acted as his counting agents and the return ing officer did not hold any inquiry into his complaint, in sub para 4 that there was fear psychosis and it looked as if the police and other government officials wanted to help the returned candidate, in sub para 5 of certain persons helping the voters to cast their votes on the polling day and that some persons cast votes 100 to 200 times and their signa tures were not obtained do not make out any charge of cor rupt practice within the provisions of section 123(7). [400FG] 11. The allegations in para 53(2) that the presiding officers did not perform their duties in accordance with law inasmuch as they failed in their duty to remove the posters and other propaganda material from the polling booth and that the election symbol of the returned candidate was displayed within 100 metres of the polling booth in viola tion of the rules do not make out any charge of corrupt practice. If at all, it could be a ground under section 100(1)(d)(iv) for setting aside election on the ground of its being materially affected but no such plea was raised. [401EF] 12. The allegation in para 52 that the returned candi date had polled cent per cent votes in his favour in certain villages of the constituency do not make out any corrupt practice or any ground of challenge under section 100 and it was rightly struck off by the High Court. [394B] 13. Order VI Rule 17 of the Code of Civil Procedure permits amendment of an election petition but the same is subject to the provisions of the Act. Section 81 prescribes a period of 45 days from the date of the election for pre senting election petition calling in question the election of the returned candidate. After the expiry of that period no election petition is maintainable and the High Court or this Court has no jurisdiction to extend the period of limitation. An order of amendment permitting a new ground to be raised beyond the time specified in section 81 would amount to contravention of these provisions and is beyond the ambit of section 87 of the Act. A new ground cannot, thus, be raised or inserted in an election petition by way of amendment after the expiry of the period of limitation. [402CD] In the instant case, the election petition was presented to the Registrar of the High Court on the last day of the limitation. The amendments claimed by him are not in the nature of supplying particulars instead those seek to raise new grounds of challenge. Various paras of the election petition which are sought to be amended do not disclose 378 any cause of action. Therefore, it is not permissible to allow amendment after expiry of the period of limitation. [402A, E] 14.1 Court should not undertake to decide an issue unless it is a living issue between the parties, for if an issue is purely academic in that its decision one way or the other would have no impact on the position of the parties, it would be waste of public time to engage itself in decid ing it. [380D] Sun Life Assurance Company of Canada vs Jervis, , referred to. 14.2 Election is the essence of democratic system and purity of elections must be maintained to ensure fair elec tion. Election petition is a necessary process to hold inquiry into corrupt practice to maintain the purity of election. But there should be some time limit for holding this inquiry. [381E] 14.3 Parliament should consider the desirability of amending the election law to prescribe time limit for in quiry into the allegations of corrupt practice or to devise means to ensure that valuable time of this Court is not consumed in election matters which by afflux of time are reduced to mere academic interest. [381D]

Civil Appeal Nos. 12224 of 1975. From the Judgment and Orders dated 9.4.1974 of the Punjab & Haryana High Court in L.P.A. Nos. 213,214 and 215 of 1973. S.K. Mehta, Dhruv Mehta and Aman Vachher, for the Appellants. K.C. Dua for the Respondents. The Judgment of the Court was delivered by K. RAMASWAMY, J. The appellants are mortgagees. The respondents are the heirs of Kala Singh, the mortgagor. Kala Singh executed three mortgages in favour of the appellants Resham Singh, Jaswant Singh and Harbans Singh on September 17, 1962, June 17, 1961 and May 31, 1962 respectively hypothecating the agricultural lands of 16 kanals 16 marlas in each of the first two mortgages and 16 kanals in the third mortgage. The mortgagor filed an application under Sec. 4 of the Redemption of Mortgages (Punjab) Act, 2 of 1913, for short 'the Act '. He deposited a sum of Rs.10 in each mortgage and sought redemption of the mortgages. Ultimately the parties compromised and the mortgagor agreed to pay the balance of Rs.340 to each mortgagee within a month from May 1, 1964. The Collector passed the order on compromise under s.11 thereof on February 3, 1964. He committed default in the payment thereof. The petitions were dismis 617 sed. He filed separate suits against each mortgagee for redemption within one year under Sec. 12 of the Act on June 12, 1964. Pending suits he died. Thereafter the suits were dismissed. After obtaining mutation of their names in the revenue records the respondents filed separate suits for redemption of the mortgages, but beyond one year as contemplated under Sec. 12 read with article 14 of the Limitation Act, 1903. The suits were dismissed by the Trial Court and were confirmed by the First Appellate Court and by the High Court in Second Appeals. But the Division Bench under Clause (10) of the Letter of Patent allowed the appeals and set aside the Judgments and Decrees of the courts below and granted decree of redemption in terms of the prayer by Judgment dated April 9, 1974. Assailing the legality thereof the appeals have been filed after obtaining leave under the article 136 of the Constitution. Since common questions of facts and law arise for decision in these appeals, they are disposed of by a common judgment. The only question that was argued before the High Court and reiterated in this Court is whether the suits are barred by limitation. The contention of Shri Mehta, the learned counsel for the appellants is that the order passed by the Collector under Sec. 12 of the Act is conclusive between the parties unless the suits are laid under article 14 of the Limitation Act within one year from the date of the Order. Admittedly, the present suits have been filed beyond such limitation of one year. The High Court committed a grave error of law in applying the provisions of Sec. 60 of the Transfer of property Act and the ratio of the Privy council in Raghunath Singh & Ors. vs MT. Hansraj Kanwar & Ors., A.I.R. 1934 P.C. 205. He contends that the Act provides a right and remedy to the mortgagor and mortgagees. Section 12 of the Act makes the order conclusive and binding and Sec. 13 bars second application in that regard unless the suit is filed within one year from the date of the order. It is not open to the Civil Court to go behind the order of the Collector and enlarge the limitation provided under article 14 of the Limitation Act. All the provisions of Transfer of Property Act were not applicable to State of Punjab. Certain Provisions relating to Sale deeds and gifts were made applicable to the State of Punjab with effect from April 1, 1955 and to the area comprised in the erstwhile Pepsu State, w.e.f. May 15, 1957. As on the date when the suits were laid, section 60 of Transfer of Property Act did not apply to Punjab and so the ratio in Raghunath Singh 's case (supra) is inapplicable. The High Court committed manifest error in applying s.60. He cited decisions of Lahore High Court in support of the contention that the suit shall be laid within one year which we would advert to at a later stage. Shri Dua, learned counsel for the respondents contended that the High 618 Court is justified in holding that the suit is not barred by limitation and the ratio of the decision cited by the appellants cannot be applied. The Act is a beneficial legislation giving right to the mortgagors to seek redemption and restoration of possession of the hypotheca in summary proceedings before the revenue courts. The Act applied only to mortgage of land where the principal money secured under the mortgage does not exceed Rs. 5,000 and the hypotheca does not exceed 50 acres of land. Section 4 gives right to the mortgagor and other persons entitled to sue for redemption at any time after the principal money becomes payable and before the suit for redemption is barred, by presenting a petition to the collector for a direction i.e. mortgage be redeemed and erstwhile morgages shall put the mortgagor in possession of the hypotheca, after following the procedure in that behalf. 5 to 11 deal with the procedure. Under section 11 if the Collector, on an enquiry, forms an opinion that the sum is rightly due under the mortgage, he shall, unless he dismisses the petition under Sec. 10, make an order under Sec.6. If the sum is found larger than the sum deposited, the mortgagor shall deposit the amount with any further sum that may be due on account of interest upto date of the deposit; on making deposit within the period or extended period not exceeding 30 days, thereafter, the Collector shall make an order under Sec.6 thereto. On committing default by the Mortgagor, the Collector shall dismiss the petition. Section 6 provides the relief of redemption; of restoration of possession to the martgagor; delivery of the mortgage, deed and payment of the mortgage money to the mortgagee. Section 12, which is material for the purpose of this case, reads thus: (1) "Saving of suits to establish rights Any party aggrieved by an order made under Section 6, 7, 8, 9, 10 or 11 of this Act may institute a suit to establish his right in respect of the mortgage, but subject to the result of such suit, if any, the order shall be conclusive. (2) Setting aside ex parte orders or orders of dismissal Notwithstanding anything in this section a mortgagee against whom an ex parte order under section 7 has been made or a petitioner, whose petition has been dismissed in default under section 6 may apply to the Collector to have such order of dismissal set aside, and Collector may in his discretion set aside such order of dismissal, on such terms as to costs or otherwise as he may deem fit; provided that the order of dismissal shall not be set aside unless notice of 619 the application has been served on the opposite party. " Section 13 creates a bar to make any further petition under the Act by the mortgagor or his successor in interest. A reading of Sec. 12 clearly postulates that the aggrieved party, be it mortgagor or mortgagee, against an order made under sections 6 to 11 is empowered to institute a suit to establish his right in respect of the mortgage, subject to the result of the suit the order passed by the Collector shall be conclusive. Article 14 of the Limitation Act, 1908 which is equivalent to article 100 of the , prescribes limitation of one year from the date of the decision or the order of the officer of the Government in his official capacity. Article 61 of the present provides 30 years for redemption and recovery of the possession of the hypotheca. The limitation of 30 years runs from the date when the right to redemption or possession accrues. Articles 105, 134, and 145 of the Old would apply to the present litigation and the limitation is 60 years. In Tulsi Dass @ Nirmal Das & Ors. vs Diala Ram, (2) AIR 1943 Lah. 176 a Full Bench for which Tek Chand. J. wrote the leading judgment held at page 189 thus: "The order of the Collector does not affect the rights of the parties in any way; it is conclusive to this extent only that the petition for summary redemption has been dismissed and no other petition under the Act would lie. No suit under section 12 being necessary or comptetent, there was no bar to the mortgagor suing for redemption in the civil Courts within the period allowed by law in ordinary course. It must, therefore, be held that the mortgagor 's suit in A.I.R. 1929 Lah. 513 was rightly decreed and that the contrary conclusion reached by the Single Bench in A.I.R. 1927 Lah. 461 and re affirmed by the Division Bench in A.I.R. that it is the form of the order of the Collector which has to be seen and not the substance of it, is erroneous. This view was approved by this Court in Sheo Lal & Ors. vs Sultan & Ors. , ; by a Bench of three Judges. The facts were that the Collector did not decide the dispute on merits, but rejected the application filed under Sec. 4 of the Act holding that the application raised complicated question of facts and law and thereby he declined to exercise summary jurisdiction under the Act. On institution of the suit the plea of limitation under article 14 of Old was raised which was upheld by the Trial Court, but on 620 appeal the decree of redemption was granted and was confirmed by the High Court in Second Appeal. The same contention was reiterated before this Court. In that context Shah, J. as he then was, speaking for the court, held that it is not the form of the order of dismissal but its substance will determine the application of the period of limitation prescribed by article 14 of the . An order relegating the mortgagor to a civil suit for obtaining an order of redemption, event if becomes final, does not bar a suit for redemption for it raises no cloud on the title of the mortgagor arising out of the mortgage. Such an order is not one which is required to be set aside. An order required to be set aside is one which the officer making it has jurisdiction to make it and has the effect of barring the claim for relief unless it is set aside. It is clear that an order passed by the Collector under sections 6 to 11 is only conclusive for what was decided therein and if the adjudication made by the Collector in summary proceedings are sought to be reopened, certainly, unless the order is got over, either by the martgagor or by the mortgagee, or any person claiming right, title or interest through them being an aggrieved person within the meaning of Sec. 12, the order of the Collector binds the parties or the persons claiming right, title or interest from the parties. Take for instance, there is a dispute as in the present case about the mortgage money before the Collector. Kala Singh disputed the money secured of hypothecation but had compromised and agreed to pay the amount mentioned in the mortgages bond, namely, Rs.850 Rs. 10 in each of the mortages disputed but in the suit filed within one year he reiterated his original stand. Had the same stand been taken by the respsondents disputing the mortgage money, certainly it would not be open to the respondents as successor in interest of the mortgagor to contend that the money advanced under the mortgage was not Rs. 850, but something less. That is not the case in the present suit. They agreed to pay Rs. 850 as decided by the Collector and sought redemption in the civil suit. Thereby they are not seeking to set aside the order of the Collector, but they are seeking redemption of the mortage. Take another instance where the mortgagor disputed the execution or validity of the mortgage, bond itself and the finding was recorded against the mortgagee, i.e. the mortgage bond was not either executed or is void for being vitiated by fraud, coercion or undue influence, etc. The mortgagor successfully avoided the mortgage by a specific order passed by the Collector under the relevant provisions of the Act. If no suit was filed within a period of one year, the findings of the Collector become conclusive between the mortgagee and the mortgagor and it is not open to assail the order of the Collector after one year in a suit of 621 foreclosure or sale by the mortgagee. Therefore, what was prohibited by Sec. 12 is only the substance of the order and not the form. Once a mortgage always a mortgage and gets extinguished by payment of mortgage money by the mortgagor or decree of redemption is passed and satisfied. The creation of mortgage is an act intervivos and not a statutory or common law right. The Act accords summary remedy and the default of compliance entails with dismissal of the application and section 13 prohibits second applications for the self same relief. The remedy of civil suit for redemption available at common law, subject to limitation, is not taken away. Civil suit is not a declaratory suit, but one to redeem the mortgage and to recover possession of mortgaged property. The question then is whether the respondents are entitled to redemption of the mortgage. Section 60 of the gives right to redemption of the mortgage by instituting a suit for redemption of the mortgage property. But as seen, at the relevant time section 6D was not made applicable to Punjab. In Mussammat Bhagwan Devi vs Mussammat Bunyadi Khanum, the Division Bench held that although the and the Indian Easement Act are not in force in Punjab, the Punjab Courts when deciding cases in which principles of law dealt with by the provisions of those Acts are involved, may adopt those provisions as embodying law applicable to the case especially when the law enunciated therein coincides with the principles of equity, good conscience and justice for which there is no statutory law applicable to the Punjab. In that it was held that the mortgagor in possession had no authority, without the consent of the mortgagee, to do an act which was likely to prove destructive or permanently injurious to the property mortgaged. In Safdar Ali. vs Ghulam Mohi ud din & Ors., the Full Bench was to consider whether Doctrine of Clogging would apply when the was not made applicable to Punjab. The Full Bench held that though the Doctrine of Clogging, in terms does not apply in Punjab, when there is no statutory prohibition, governing the matter be restricted to case where something unconscionable or oppressive in the bargain calls for redress. In terms the Full Bench applied the Principles in the provisions of the consistent with the Doctrine of Justice, Equity and Good Conscience. In Mian Nizam & Din Mohammad vs Lala Ram Sukh Das, the right of prior mortgagee purchasing property mortgaged to him be deemed to keep alive for his benefit as against subsequent mort 622 gagee. It was held that the principles contained in section 101 of would be applicable and applied. In Milkha Singh vs Mst. Shankari & Ors., AIR (34) Lahore 1 a Full Bench of five Judges applied the Doctrine of Part Performance under section 53A of the as a defence. It was further held that section 53A is based on equitable principles which were previously applicable to whole of India, though the per se was not applied to Punjab. In M/s Ram Gopal Dula Singh vs Sardar Gurbux singh Jiwan Singh & Ors., Kapur, J., as he then was speaking for the Division Bench, held that though section 6 of the is not applicable to Punjab, the right to expectancy may not be transferred. It was further held that in Punjab and Lahore there is no disagreement as to Principles of being applicable to Punjab because they are based on Justice, Equity and Good conscience. This view was again reiterated in Atma Singh & Gian Singh vs Mangal Singh & Ors., I.L.R.1957 Jan. June (Vol.10) 79 and applied sections 58, 92 and 100, Doctrine of Subrogation, but excluded the applicability of the technical rules. This Court in Ganeshi Lal vs Jyoti Pershad, held that though the does not apply to Punjab, the priciple of equity, justice and good conscience would apply to Punjab. If one of the several mortgagor redeems the entire mortage by paying a sum less than the full amount due under the mortgage, he is entitled to receive from his co mortgagors only their proportionate shares on the amount actually paid by him. He is not entitled to claim their proportionate shares on the amount which was due to the mortages under terms of the mortgage on the date of redemption. The same principle laid down in Suryanarayan vs Sriramulu, [1913] 25 M.L.J. p. 16 was referred to with approval in Ganeshi Lal 's case. Though in Ganeshi Lal 's case the entire claim under the suit for contribution was not decreed, the provision of were applied, on the Principles of equity, justice and good conscience and granted degree pro rata. We hold that applying the principle of Justice, Equity and Good Conscience though section 60 of the per se did not apply, the principles in section 60 would apply. Though the application for redemption was dismissed under s.11 of the Act and became conclusive under section 12 the mortgagor 's right to redemption is not barred. A suit for redemption under section 60 of will be maintainable and civil court has jurisdiction to grant the decree of redemption. In Gangu & Ors., vs Maharaj Das & Ors., I.L.R. 15 Lahore 380 a 623 Full Bench following Kaura vs Ram Chand Lah. 206 held that unless the order of the Collector be challenged within one year the civil court has no jurisdiction to entertain the suit. In this case the right to redemption of mortgage itself was barred by limitation. Therefore, the ratio does not apply. Though the ratio in Bhagat Ram & Ors. vs Jamna Ram & Ors. is in favour of the appellants, in our view the ratio therein is not good law. Thus we hold that the suits for redemption are admittedly within limitation either under the Old Limitation or under the new . The bar of Sec. 12 of the Act does not oust the jurisdiction of the civil Court to entertain and grant decree of redemption. The appeals are accordingly dismissed, but in the circumstances parties are directed to bear their own costs throughout. Y.L. Appeal dismissed.

Kala Singh predecessor of the respondents executed three mortgages hypothecating agricultural lands in favour of the appellants. The mortgagor filed an application under Section 4 of the Redemption of Mortgages (Punjab) Act 2 of 1913 and sought redemption of the mortgages, by paying Rs.10 in respect of each of the mortgage. The parties compromised regarding the amount payable and the Collector passed the order on compromise under Section 11 of the Act on Feb. 3, 1964. The mortgagor having committed default in making the payment within the time allowed for the purpose, the petitions were dismissed by the Collector. Thereupon the mortgagor filed three separate suits against each mortgagee for redemption within one year under Section 12 of the Act on June 12, 1964 and during the pendency of the suits, he having died the suits were dismissed. The respondents after obtaining mutation of their names in the revenue records, filed separate suits for redemption of the mortgages but beyond one year as contemplated under section 12 read with Art.14 of the Limitation Act 1908. The suits were dismissed by the trial court; which order was later affirmed both by the first appellate Court as also by the High Court. On a further appeal under the Letter Patent Act, the Division Bench of the High Court allowed the appeals and set aside the judgments and Decrees of the courts below and granted decree of redemption holding that the suits were not barred by limitation. The appellants have thus filed these appeals after obtaining special leave. The appellants have reiterated their contention amongst others that the suits were barred by limitation and further the High Court was not right in applying the provisions of Section 60 of the Transfer of Property Act. Dismissing the appeals this Court, 615 HELD: Section 13 creates a bar to make any further petition under the Act by the mortgagor or his successor in interest. A reading of Section 12 clearly postulates that the aggrieved party, be it mortgagor or mortgagee, against an order made under sections 6 to 11 is empowered to institute a suit to establish his right in respect of the mortgage. Subject to the result of the suit, the order passed by the Collector shall be conclusive. Article 14 of the Limitation Act, 1908 which is equivalent to Article 100 of the , prescribes limitation of one year from the date of the decision or the order of the officer of the Government in his official capacity. Article 61 of the present provides 30 years for redemption and recovery of the possession of the hypotheca. The limitation of 30 years runs from the date when the right to redemption or posession accrues. Articles 105, 134 and 145 of the old would apply to the present litigation and the limitation is 60 years.(619A C) The creation of mortgage is an act intervivos and not a statutory or common law right. The Act accords summary remedy and the default of compliance entails with dismissal of the application and section 13 prohibits second application for the self same relief. The remedy of civil suit for redemption available at common law, subject to limitation, is not taken away. Civil suit is not a declaratory suit, but one to redeem the mortgage and to recover possession of mortgage property. [621B C] In the instant case, applying the principle of Justice, Equity and Good conscience though section 60 of the Transfer of Property Act, per se, did not apply, the principles in section 60 would apply. [622G] Though the application for redemption was dismissed under section 11 of the Act and and became conclusive under section 12, the mortgagor 's right to redemption is not barred. A suit for redemption under section 60 of the Transfer of Property Act will be maintainable and civil court has jurisdiction to grant the decree of redemption. [622G] The suits for redemption are admittedly within limitation either under the old Limitation or under the new . The bar of section 12 of the Act does not oust the jurisdiction of the civil court to entertain and grant decree of redemption. [623B] Raghunath Singh & Ors. vs Mt. Hansraj Kanwar and Ors. A.I.R. 1934 P.C. 205; Tulsi Dass @ Nirmal Das Ors., vs diala Ram AIR 1943. ; Sheo Lal & Ors. vs Sultan and Ors. ; ; Mussammat Bhagwan Devi vs Mussammat Bunyadi Khanum ; Safdar Ali vs Ghulam Mohi ud din Ors., ; Mian Nizam & Din Mohammed vs Lala Ramsukh Das, ; Milkha Singh vs Mst. Shankari & Ors., AIR (34) Lahore 1;Ms. Ram Gopal Dula Singh vs Sardar Gurbux Singh Jiwan Singh and Ors., ; Atma Singh & Gian Singh vs Mangal Singh and Ors., ILR 1957 Jan. June (Vol. 10) 79; Ganesh Lal vs Jyoti Pershad, , Suryanarayan vs Sri ramulu, [1913] (25) M L.J.P.16; Referred to. Gangu & Ors., vs Maharaj Das & Ors., ILR 15 Lahore 380; Kaura vs Ram Chand, , Lah.206 Distinguished. Bhagat Ram & Ors. vs Jamna Ram and Ors., [1928] 114 I.C. 447 Not approved.

CIVIL APPEAL NO. 1015 OF 1976 (Appeal by Special Leave from the Judgment and order dated 31 5 1976 of the Kerala High Court in CRP No. 1615/75). CIVIL APPEAL NO. 1023 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 3 1 1977 of the Kerala High Court in CRP No. 2879/76). CIVIL APPEAL NO. 2811 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 22 10 1976 of the Kerala High Court in CRP No. 1086/76). CIVIL APPEAL NOS. 574 575 OF 1978 (Appeals by Special Leave from the Judgment and Orders dated 30 3 1976 and 11 10 76 of the Kerala High Court in CRP No. 1640 and Review Petition No. 73/76 respectively). 844 CIVIL APPEAL NO. 40 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 25 11 1976 of the Kerala High Court in CRP No. 1880/76). CIVIL APPEAL NO. 143 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 28.9.1976 of the Kerala High Court in C.R.P. No. 599/76). CIVIL APPEAL NO. 1309 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 25 2 1977 of the Kerala High Court in CRP No. 4194/76). CIVIL APPEAL NO. 1863 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 26 5 77 of the Kerala High Court in CRP No. 1815/76A). CIVIL APPEAL NO. 2070 OF 1977 (Appeal by Special Leave from the Judgment and order dated 18.8.1976 of the Kerala High Court in CRP No. 68/76). CIVIL APPEAL NO. 2584 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 2 9 1976 of the Kerala High Court in CRP No. 332/76 E). CIVIL APPEAL NO. 2585 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 12 10 1976 of the Kerala High Court in CRP No. 829/76). CIVIL APPEAL NO. 2586 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 12 10 1976 of the Kerala High Court in CRP No. 726 of 1976). CIVIL APPEAL NO. 2587 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 20.12.1976 of the Kerala High Court in CRP No. 3209/76). CIVIL APPEAL NO. 2623 OF 1977 (Appeal by Special Leave from the Judgment and Order dated 10 12 1976 of the Kerala High Court in CRP No. 2626/75). CIVIL APPEAL NO. 290 OF 1978 (Appeal by Special Leave from the Judgment and Order dated 3 1 1978 of the Kerala High Court in CRP No. 1977 of 76 A). CIVIL APPEAL NO. 362 OF 1978 (Appeal by Special Leave from the Judgment and Order dated 29 7 1977 of the Kerala High Court in CRP No. 1553/77 D). 845 CIVIL APPEAL NO. 882 OF 1978 (Appeal by Special Leave from the Judgment and Order dated 29 11 1977 of the Kerala High Court in CRP No. 4574/78 G). CIVIL APPEAL NO. 227 OF 1978 (Appeal by Special Leave from the Judgment and Order dated 15 3 1977 of the Kerala High Court in CRP No. 3028/76 E). CIVIL APPEAL NO. 869 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 12 10 1977 of the Kerala High Court in CRP Nos. 635 and 859 of 1976). CIVIL APPEAL NO. 870 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 25 7 1977 of the Kerala High Court in CRP No. 2333/77). CIVIL APPEAL NO. 871 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 27 9 1976 of the Kerala High Court in CRP No. 128/76 B). CIVIL APPEAL NO. 872 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 15 10 1976 of the Kerala High Court in CRP No. 465/76). CIVIL APPEAL NOS. 873 874 OF 1979 (Appeals by Special Leave from the Judgment and Order dated 4 3 1977 of the Kerala High Court in CRP Nos. 1682 and 1706/76D). CIVIL APPEAL NO. 875 OF 1979 (Appeal by Special Leave from the Judgment and order dated 2 2 1978 of the Kerala High Court in CRP No. 383/78 A). CIVIL APPEAL NOS. 876 877 OF 1979 (Appeals by Special Leave from the Judgment and Order dated 17 3 1978 of the Kerala High Court in CRP Nos. 4977 and 4978 of 1976 A). CIVIL APPEAL NO. 878 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 20 3 1978 of the Kerala High Court in CRP No. 4980 of 1976 B). CIVIL APPEAL NO. 879 OF 1978 (Appeal by Special Leave from the Judgment and Order dated 20 3 1978 of the Kerala High Court in CRP No. 21/77 B). CIVIL APPEAL NO. 881 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 26 7 1978 of the Kerala High Court in CRP No. 2098/78). 846 CIVIL APPEAL NO. 883 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 2 8 1978 of the Kerala High Court in CRP No. 2203/77 G). CIVIL APPEAL NO. 884 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 1 9 1978 of the Kerala High Court in CRP No. 1978 of 78 F). CIVIL APPEAL NO. 885 OF 1979 (Appeal by Special Leave from the Judgment and order dated 17 7 1978 of the Kerala High Court in CRP No. 146/77 C). CIVIL APPEAL NO. 886 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 16 8 79 of the Kerala High Court in CRP No. 2351/78A). CIVIL APPEAL NO. 889 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 23.11.1978 of the Kerala High Court in CRP No. 28 of 77 C). CIVIL APPEAL NO. 890 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 3 11 1978 of the Kerala High Court in CRP No. 5358/76 E). CIVIL APPEAL NO. 894 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 19 12 1977 of the Kerala High Court in CRP No. 3980/77E). CIVIL APPEAL NO. 895 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 2 12 1977 of the Kerala High Court in CRP No. 2542/77B). CIVIL APPEAL NO. 896 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 31 3 1978 of the Kerala High Court in CRP No. 3264/76 F). CIVIL APPEAL NO. 897 OF 1979 (Appeal by Special Leave from the Judgment and order dated 27 5 1977 of the Kerala High Court in CRP No. 1978/76 A). CIVIL APPEAL NO. 898 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 12 8 1977 of the Kerala High Court in CRP No. 2898/77 C). CIVIL APPEAL NO. 899 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 3 8 1978 of the Kerala High Court in CRP No. 4686/76 A). CIVIL APPEAL NO. 900 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 8 9 1978 of the Kerala High Court in CRP No. 3941/76). 847 CIVIL APPEAL NO. 901 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 28 2 1977 of the Kerala High Court in CRP No. 1665 of 1976). CIVIL APPEAL NO. 902 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 2 3 1978 of the Kerala High Court in CRP No. 633/78 E). CIVIL APPEAL NO. 903 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 26 7 1978 of the Kerala High Court in CRP No. 4762/76 F). CIVIL APPEAL NO. 1019 OF 1979 (Appeal by Special Leave from the Judgment and Order dated 18 10 1978 of the Kerala High Court in CRP No. 1117/78 H). CIVIL APPEAL NO. 1015/76 For the Appellants: T. R. G. Warriyar and A. section Nambiar For the Respondents: P. A. Francis and N. Sudhakaran. CIVIL APPEAL NO. 1723/77 For the Appellant: K. section Ramamurthi, T. R. G. Warriyar, section Balakrishnan, C. section A. Iyer, M. K. D. Namboodari and C. K. Bharthan. For the Respondents: M. M. Abdul Khader, Advocate General, Kerala and K. M. K. Nair. For the Intervener: K. K. Venugopal, Addl. Genl, and K. J. John. CIVIL APPEAL NO. 2811 OF 1977 For the Appellant: K. N. Bhat and V. K. Verma, For the Respondents: Dr. V. A. Seiyed Mohammad and K. M. K. Nair. CIVIL APPEAL NOS. 574 575/78 For the Appellants: G. B. Pai, K. J. John and J. B. Dadachanji. For the Respondents: K. T. Harindra Nath and V. J. Francis. CIVIL APPEAL NO. 40/77 For the Appellant: M. C. Bhandare, K. J. John, and J. B. Dadachanji. For the Respondents: P. A. Francis and N. Sudhakaran. CIVIL APPEAL NO. 143/77 For the Appellants: T. C. Raghavan and P. K. Pillai. For Respondents 1 2: K. M. K. Nair. 848 CIVIL APPEAL NO. 1309/77 For the Appellant: T. C. Raghavan, and N. Sudhakaran, For the Respondents: K. M. K. Nair. For the Intervener: Mathai M. Paikeday and N. Sudhakaran. CIVIL APPEAL NO. 1863/77 For the Appellant: T. R. G. Warriyar and A. section Nambiar, For the Respondents: K. R. Nambiar and V. J. Francis, CIVIL APPEAL NO. 2070/77 For the Appellant: T. C. Raghavan, N. Sudhakaran and P. K. Pillai, For the Respondents: K. M. K. Nair, CIVIL APPEAL NO. 2584/77 For the Appellants: T. C. Raghavan, N. Sudhakaran and P. K. Pillai, For Respondents 1 3: P. A. Francis and K. M. K. Nair. CIVIL APPEAL NO. 2585/77 For the Appellant: M. C. Bhandare, Mrs. section Bhandare, P. Santhalingam, A. N. Karhanis and Miss M. Poduval. For the Respondents: K. M. K. Nair, CIVIL APPEAL NO. 2586/77 For the Appellant: P. K. Pillai. For the Respondents: K. M. K. Nair. CIVIL APPEAL NO. 2587/77 For the Appellant: K. T. Harindra Nath and N. Sudhakaran. For the Repondents: V. J. Francis. CIVIL APPEAL NO. 2623/77 For the Appellant: T. R. G. Warriyar and A. section Nambiar. For the Respondents: G. Govindan Nair and K. R. Nambiar. CIVIL APPEAL NO. 290/78 For the Appellants: Anant Krishnan, section Balakrishnan and M. K. D. Namboodri. For the Respondents 1 3: P. Govindan Nair and K.M.K. Nair. CIVIL APPEAL NO. 362/78 For the Appellants: K. T. Harindernath and Mrs. section Gopala krishnan. For the Respondents: K. M. K. Nair. CIVIL APPEAL NO. 882/78 For the Appellants : T. C. Raghavan, section Balakrishnan, C. K. Bharathan, CSA Iyer and M. K. D. Namboodri. For the Respondents: P. Govindan Nair and K. R. Nambiar. 849 CIVIL APPEAL NO. 227/78 For the Appellants: Dr. V. A. Syed Mohd and K. R. Nambiar. For the Respondent: F. section Nariman, K. Joseph and K. J. John. For the Intervener (Rubber Board): K. K. Venugopal, Addl. and K. J. John. CIVIL APPEAL NO. 869/79 For the Appellants: N. Sudhakaran. For the Respondents: K. M. K. Nair. CIVIL APPEAL NO. 870/79 For the Appellant: N. Sudhakaran. For the Respondents: K. M. K. Nair. CIVIL APPEAL NO. 871/79 For the Appellant: A. section Nambiar. For the Respondent: K. M. K. Nair. CIVIL APPEAL NO. 872/79 For the Appellant: P. K. Pillai. For the Respondents: K. R. Nambiar. CIVIL APPEAL NOS. 873 874/79 For the Appellant: N. Sudhakaran. For the Respondents 1 3: V. J. Francis. For the Respondents 4 5: A. section Nambiar. For the Respondent No. 6: section B. Saharya. CIVIL APPEAL NO. 875/79 For the Appellants: A. section Nambiar. For the Respondents: V. J. Francis. CIVIL APPEAL NO. 876/79 For the Appellants: T. R. G. Warriyar and A. section Nambiar. For the Respondents 1 3: V. J. Francis. CIVIL APPEAL NO. 877/79 For the Appellant: A. section Nambiar. For the Respondents 1 3: V. J. Francis. CIVIL APPEAL NO. 878/79 For the Appellants: A. section Nambiar. For the Respondents 1 3: V. J. Francis. CIVIL APPEAL NO. 879/78 For the Appellants: A. section Nambiar. For the Respondents 1 2: V. J. Francis. CIVIL APPEAL NO. 881/79 For the Appellant: Saroja Goplakrishnan. For the Respondents 1 3: V. J. Francis. 850 CIVIL APPEAL NO. 883/79 For the Appellants: section Balakrishnan and M. K. D. Namboodri. For the Respondents: K. M. K. Nair. CIVIL APPEAL NO. 885/79 For the Appellants: A. section Nambiar. For the Respondents 1 3: V. J. Francis. CIVIL APPEAL NO. 884/79 For the Appellant: P. K. Pillai, Sr. For the Respondents: Mr. K. R. Nambiar. CIVIL APPEAL NO. 886/79 For the Appellant: A. section Nambiar. For the Respondents: V. J. Francis. CIVIL APPEAL NO. 889/79 For the Appellants: section Balakrishnan and M. K. D. Namboodri. For the Respondents: K. M. K. Nair. CIVIL APPEAL NO. 890/79 For the Appellants: A. section Nambiar. For the Respondents: V. J. Francis. CIVIL APPEAL NO. 894/79 For the Appellant: N. Sudhakaran. For the Respondents: K. R. Nambiar. CIVIL APPEAL NO. 895/79 For the Appellants: M. C. Bhandare, section Bhandare, Miss M. Poduval and J. Santhalingam. For the Respondents 1 3: K. R. Nambiar. CIVIL APPEAL NO. 896/79 For the Appellant: N. Sudhakaran. For the Respondents: V. J. Francis. CIVIL APPEAL NO. 897/79 For the Appellants: P. K. Pillai. For the Respondents: V. J. Francis. CIVIL APPEAL NO. 898/79 For the Appellants: A. section Nambiar. For the Respondents: K. R. Nambiar. CIVIL APPEAL NO. 899/79 For the Appellants: section Balakrishnan and M. K. D. Namboodri. For the Respondents: K. R. Nambiar. CIVIL APPEAL NO. 900/79 For the Appellant: section Balakrishnan and M. K. D. Namboodri. For the Respondents: 1 3: K. R. Nambiar. 851 CIVIL APPEAL NO. 901/79 For the Appellant: P. K. Pillai. For the Respondents: K. M. K. Nair. CIVIL APPEAL NO. 902/79 For the Appellant: section Balakrishnan and M. K. D. Namboodri. For the Respondents: K. R. Nambiar. CIVIL APPEAL NO. 903/79 For the Appellant: section B. Saharya. For the Respondents: V. J. Frnacis. CIVIL APPEAL NO. 1019/79 For the Appellant: T. T. Kunhikannan. For the Respondents: V. J. Francis. The Judgment of the Court was delivered by SHINGHAL, J. The learned counsel for the appellants have categorically stated at the Bar that no question relating to the validity of the Kerala Land Reforms Act, 1963 (Act 1 of 1964), hereafter referred to as the Act, or any of its provisions, arises in these appeals by special leave. We have heard them together virtually as companion appeals at the instance of learned counsel for they arise out of several judgments of the High Court of Kerala in matters relating to the implementation of the provisions for the restriction on ownership and possession of land in excess of the ceiling area and the disposal of excess land. These are the subject matter of Chapter III of the Act, as amended from time to time. It is not necessary to refer to the dates of all judgments of the High Court of Kerala, or to all the points of controversy there, as learned counsel have been able to channelise their arguments into three main points of controversy, which have been argued at length. It is true that all these points do not arise in all the cases before us, and some learned counsel have raised additional arguments in the peculiar facts and circumstances of their cases. It will therefore be convenient and proper to deal with the three main points first, and to take up the additional points for consideration with reference to the appeals in which they have been raised for our consideration. This, it is agreed, will be a proper and a fair course to adopt for the disposal of these appeals. It is also agreed by learned counsel that the other appeals in which such additional points have not been raised shall stand decided according to our decision on the three main points. In order to understand the controversy in its proper perspective, it may be mentioned that, as in the other States in the country, the Kerala State legislature felt the necessity of making "comprehensive" 852 land reforms in the State. The Kerala Agrarian Relations Act, 1960 (Act 4 of 1961) was accordingly passed, and received the assent of the President on January 21, 1961. Some of its provisions were brought into force with effect from February 15, 1961. This Court struck down that Act as unconstitutional in its application to the ryotwari lands of Hosdurg and Kasaragod taluka. The Kerala Ryotwari Tenants and Kudikidappukars Protection Act, 1962, was then passed for the temporary protection of tenants in those taluks. The State High Court declared it null and void in its application to the ryotwari lands of the Malabar area and most of the lands of Travancore area. So the Kerala Tenants and Kudikidappukars Protection Act, 1963, was passed to provide some protection to tenants. It was an interim legislation. Even so it repealed the Kerala Ryotwari Tenants and Kudikidappukars Protection Act, 1962, and suspended the operation of the Kerala Agrarian Relations Act, 1960. After re examining the requirements in the field of land reforms as a whole, the Kerala Land Reforms Bill, 1963, was published in State Gazette on September 15, 1963. It covered a wide field in the matter of land reforms and, inter alia, provided for the imposition of a ceiling on "holding" of lands, the surrender of excess lands grant of compensation therefor, and the assignment of the surrendered lands in accordance with the order of priority mentioned in the Bill, collection of purchase price, constitution of Land Tribunals and Land Board etc. The Bill was enacted as the Kerala Land Reforms Act, 1963 (Act 1 of 1964), and received the assent of the President on December 31, 1963. It was amended extensively, and in several material particulars, by Act 35 of 1969, and then by Act 25 of 1971 and Act 17 of 1972. There were other amendments also, but it is agreed that they do not bear on the controversy before us. The three main points of controversy in these appeals have been formulated by learned counsel for the appellants as follows: 1. Whether lands converted into plantations between April 1, 1964 and January 1, 1970 qualify for exemption under section 81(1)(e) of the Act. Whether a certificate of purchase issued by the Land Tribunal under section 72K of the Act is binding on the Taluk Land Board in proceedings under Chapter III of the Act. Whether the validity or invalidity of transfers effected by persons owning or holding lands exceeding the ceiling limit should be determined with reference to the ceiling area in force on the date of the transfer or in accordance with the ceiling area prescribed by Act 35 of 1969 whether sub section (3) of section 84 is retrospective in operation. 853 We shall examine the three points one by one but before doing so it will advantageous to refer briefly to the substantive provisions of the Act which bear on the appeals before us. It will be recalled that the Act came into existence when the other attempts to make legislative provision for land reforms did not work out satisfactorily for one reason or the other. The Act was therefore enacted by way of "a comprehensive legislation" to bring about land reforms in the Kerala State. While Chapter I of the Act contains provisions relating, inter alia, to its commencement and defines some of the important terms and expressions, Chapter II contains many provisions for the benefit of tenants and "deemed tenants", including restoration of lands and fixity of their tenure, purchase of landlords ' rights by cultivating tenants and rent payable by certain categories of tenants etc. The provisions of the Chapter do not apply to the leases, tenancies and transferred lands and transactions mentioned in section 3. We are however primarily concerned with Chapter III under the general rubric "Restrictions on ownership and possession of land in excess of ceiling area and disposal of excess lands. " Section 81 deals with "exemptions", including "plantations". Section 82 prescribes the "ceiling area", section 83 prohibits the owning or holding or possessing under a mortgage lands in excess of the ceiling area. Section 84 declares what voluntary transfers shall be deemed to be invalid. Subsection (3) of the section has attracted much controversy and we shall deal with it in due course. Section 85 makes it obligatory to surrender the excess land, and section 86 vests such excess lands in the State Government free from all encumbrances. Section 87 makes provision for the surrender of excess land obtained by gift, purchase or mortgage, lease, surrender or any other transfer inter vivos or by bequest or inheritance or otherwise if the total extent of land thereby exceeds the ceiling area. These are the main provisions which bear on the three points which have been raised for our consideration. Point No. 1 The question is whether lands converted into plantation between April 1, 1964 and January 1, 1970 are exempt from the operation of the provisions of Chapter III of the Act in regard to the restriction on ownership and possession of land in excess of the ceiling area prescribed by it. It will be recalled that while section 82 prescribes the ceiling area of the land, section 81 states what shall be exempted from its operation. Clause (e) of sub section (1) of that section thus specifically provides that the provisions of Chapter III shall not be applicable to "plantations". That has been so from the inception of the Act, and the question therefore is whether those who felt tempted by the exemption in favour of plantations and converted their lands 854 into plantations after the commencement of the Act, would get the benefit of the exemption and, if so, from which date would the conversion be recognised ? This has been dealt with in sub section (4) of section 82 of the Act which prescribes the ceiling. It is not in dispute before us that section came into force on April 1, 1964. The sub section as originally enacted in Act I of 1964 therefore came into force on that date. It read as follows: "82(4) Where, after the commencement of this Act, any class of land specified in Schedule II has been converted into any other class of land specified therein, the extent of land that may be owned or held by a family or adult unmarried person owning or holding such land at the time of the conversion shall be determined without taking into account such conversion. " Section 82 was however substantially amended by section 66 of the Amending Act of 1969 which, inter alia, reduced the ceiling area of the land and amended the wordings of sub section (4) also. That section came into force on January 1, 1970. It is not necessary to refer to it as the legislature amended sub section (4) of section 82 once again, by section 12 of the Amending Act of 1971, which, by virtue of section 1 of that Act, also came into force on January 1, 1970 and thereby supplanted, from the very inception, the amendment which had been brought about by the Amending Act of 1969. The amended sub section, which is the subject matter of the point under consideration, reads as follows, "82(4) Where, after the commencement of this Act, any class of land specified in Section II has been converted into any other class of land specified in that Schedule or into a plantation, the extent of land liable to be surrendered by a person owning or holding such land shall be determined without taking into consideration such conversion. " The controversy therefore is whether the restriction of sub section (4) of section 82 came into force from January 1, 1970 because section 12 of the Amending Act of 1971 was brought into force on that date, or whether it came into force on April 1, 1964, when section 82 as originally enacted by the Act came into force. As it happens, all the three Acts contain provisions about their "commencement" and it is these which have to be interpreted for the purpose of resolving the dispute. Sub section (3) of section 1 of the Act provides as follows, "1(3). The provisions of this Act, except this section which shall come into force at once, shall come into force 855 on such date as the Government may, by notification in the Gazette, appoint: Provided that different dates may be appointed for different provisions of this Act, and any reference in any such provision to the commencement of this Act, shall be construed as reference to the coming into force of that provision. " It therefore provides that: (i) section 1 of the Act shall come into force at once, (ii) the other provisions of the Act shall come into force on such dates as the Government may appoint, (iii) different dates may be appointed for different provisions of the Act, and (iv) any reference in any such provision to the "commencement of this Act" shall be construed as a reference to the coming into force of that provision. The Act was published in the Gazette on January 14, 1964, and, by virtue of section 3 of the Kerala Interpretation and General clauses Act, section 1 came into force on that date. Section 82 as has been stated, came into force on April 1, 1964, and the reference in sub section (4) of that section to the "commencement of this Act" meant a reference to the coming into force of that provision with effect from April 1, 1964. It may be that the first three rules or directions contained in sub section (3) (mentioned above) were spent on the coming into force of section 1 of the Act or its other provisions on the dates appointed for them, but, for obvious reasons, rule (iv) continued to hold the field in as much as it laid down the rule of construction that any reference to the "commencement of this Act" shall be construed as a reference to the coming into force of that particular provision. It was therefore applicable as a general rule of construction whenever it became necessary to ascertain the date of commencement of a particular provision of the Act other than section 1. It will be recalled that sub section (4) of section 82, as originally incorporated in the Act, came into force on April 1, 1964. As has been mentioned, sub section (4) of section 82 was emended by section 66 of the Amending Act of 1969, which came into force on January 1, 1970, but that proved to be fortuitous because it was supplanted by section 12 of the Amending Act of 1971 from the same date. The sub section, as amended by the Amending Act of 1971, also dealt with the conversion of land into any other class of land "after the commencement of this Act", but it added the words "or into a plantation" and provided that such conversion shall not be taken into consideration for determining the extent of land liable to be surrendered. It has been argued that the expression "the commencement 856 of this Act" refers to January 1, 1970, on which date section 12 of the Amending Act of 1971 was brought into force, and not to April 1, 1964 when it was first brought into force as mentioned above. Reference in this connection has been made to sub section (2) of section 1 of the Amending Act of 1971. The argument is however untenable on the plain meaning of the proviso to sub section (3) of section 1 of the Act which clearly states that any reference in any provision of the Act to the "commencement of this Act" shall be construed as a reference to the coming into force of that provision. So when the "provision" of sub section (4) of section 82 was brought into force on April 1, 1964, its amended version would also come into force from that date. And it will be a matter of no consequence that section 12 of the Amending Act of 1971, which amended the sub section, came into force on January 1, 1970. It will be remembered that section 66 of the Amending Act of 1969 which amended section 82 came into force on January 1, 1970, and as the legislature decided to amend it once again by section 12 of the Act of 1971, with retrospective effect from the same date (January 1, 1970), it made a specific provision to that effect in section 1 of the Amending Act of 1971 and left the date of commencement of the Act for purposes of sub section (4) of section 82 to be determined according to the proviso to sub section (3) of section 1 of the Act which, as has been stated, was a subsisting provision. It would follow that sub section (4) as amended by the Amending Act of 1971 came into force on April 1, 1964. It may be that, as has been argued by Mr. Venugopal, the expression "commencement of this Act" is a term of "art". We have interpreted it as it stands, without detracting from the value attributed to it by Mr. Venugopal. Mr. Warriyar has however argued that particular significance attaches to the use of the expression "provisions" or "provision" in section 1(3) of the Act and that the High Court erred in presuming that "at all relevant times a 'provision ' which resulted in certain consequences was in force from April 1, 1964 onwards. " He has invited our attention to Saidu Muhammed vs Bhanukuitan(1) for the contention that the true meaning of "provision" is a section or series of sections forming a self contained integral whole, that section 82 to 85 should be construed as a "composite provision" dealing with the ceiling area, and that the assumption that section 82(4) alone was brought into force as a distinct provision, when section 83 had not been brought into force, is not legally sustainable. The Century Dictionary (which is an encyclopaedic lexicon of the English language) defines "provision" as follows, 857 'In law, a stipulation; a rule provided; a distinct clause in an instrument or statute; a rule or principle to be referred for guidance; as, the provisions of law; the provisions of the Constitution. " In "Words and Phrases" (Permanent Edition) the definition is as follows: "As applied to legislation, the word "provision" has this well understood meaning: "Actual expression in language" the clothing of legislative ideas in words which can be pointed out on the page and read with the eye. " A provision is therefore a distinct rule or principle of law in a statute which governs the situation covered by it. So an incomplete idea, even though stated in the form of a section of a statute, cannot be said to be a provision for, by its incompleteness, it cannot really be said to provide a whole rule or principle for observance by those concerned. A provision of law cannot therefore be said to exist if it is incomplete, for then it provides nothing. Examined in this perspective, section 82 of the Act (as amended by section 12 of the Amending Act of 1971) is, to say the least, a distinct rule or clause for it provides the extent of the ceiling area in the cases mentioned in it (sub section (1) ), its effect on the lands owned or held individually by the members of a family or jointly by some or all of the members of the family (sub section (2) ), the taking into account of the shares of the members of the family or an adult unmarried person (sub section (3)), the effect of conversion of any class of land specified in Schedule II into any other class of land specified in the schedule or into a plantation and the extent of land liable to be surrendered by a person owning or holding such land (sub section (4) ), lands owned by a private trust or a private institution (sub section (5) ) and exemption of lands covered by section 81 (sub section (6) ). The section is therefore a "provision" by any standard, and it is futile to argue that this is not so merely because the provisions relating to the prohibition on the owning or holding or possessing under a mortgage lands in the aggregate in excess of the ceiling area and the surrender of excess land and its vesting in the State Government have been dealt with in the other sections (83, 85 and 86). Sections 83, 85 and 86 contain certain other provisions relating to the law of ceiling on land, but that cannot detract from the basic fact that section 82 contains a provision in fact an important provision of the law relating to the imposition of ceiling on land dealt with in Chapter III. It may well be said that sub section (4) of section 82 is also a provision of the law by itself, for it lays down a dis 858 tinct rule relating to conversion of lands for observance by all concerned. We have gone through Saidu Muhammed vs Bhanukuitan,(1) but that was quite a different case where the section which authorised the launching of the prosecution of a defaulter was brought into force, but not the other provision which prescribed the period of limitation for the prosecution, and the High Court, was persuaded to take the view that it was the legislative intent that the prosecution should be governed by the limitation prescribed by the other section. In the case before us, however, the application of section 82 is not dependent on any other section, so as to make it an incomplete provision by itself. It deals with "ceiling area" and is a provision by itself, so that it could be brought into force from a date different from section 83 which prohibited the holding of land in excess of the ceiling area. It may be pointed out, that the "ceiling" prescribed by section 82 was material not only for the purpose of Chapter III of the Act, but had a direct co relation to some of the provisions of Chapter II e.g. sections 16 and 53. It has next been argued by Mr. Warriyar that in view of the decisions of this Court in State of Kerala and others vs Philomina etc.(2) and State of Kerala and others vs K. A. Gangadharan,(3) the High Court erred in taking the view that section 82(4) came into force on April 1, 1964 because it has been held in both those cases that determination of the surplus land was to be on the basis of the situation existing on January 1, 1970, and that if any land had been converted into a plantation before that date, it had necessarily to be exempted from the operation of the ceiling law by virtue of section 81. But they were different cases. Thus State of Kerala vs Philomina (supra) related to the transfer of "Kayal" lands between September 15, 1963 and January 1, 1970. As Chapter III of the Act was not applicable to those lands because of the exemption under section 81, and as that exemption continued until January 1, 1970 when section 65 of the Amending Act of 1969 came into force, it was held by this Court that as the exemption was not withdrawn until January 1, 1970, the transfers made between September 15, 1963 and January 1, 1970 were valid under the provisions of the Act. The decision in that case thus turned on the meaning of section 83 and 85. That view was noticed by this Court in State of Kerala and others vs K. A. Gangadharan (supra) and it was held that the dominant legislative intent was the imposition of the ceiling on lands and the consequential obligation to 859 surrender lands owned or held in excess of the ceiling area on the notified date, namely, January 1, 1970. The gifts of excess land made on March 28, 1974 were therefore ignored. That was also, therefore, a different case and cannot avail the appellants. The view taken by the High Court in Ramunni Nair vs State of Kerala(1) in regard to the meaning to be attached to the words "the commencement of this Act" is thus substantially correct and does not call for interference by us. It may be mentioned that learned Advocate General has pointed out that in the Act as it stands amended at present, the expression "commencement of this Act" refers to the commencement of the Act, and while referring to the commencement of the Amending. Act of 1969, the words used are "commencement of the Kerala Land Reforms (Amendment) Act, 1969" and that the Amending Act of 1971 has also been referred to as such. It is therefore futile to contend that the rule of interpretation mentioned in sub section (3) of section 1 that any reference in a provision of the Act to the "commencement of this Act" shall be construed as a reference to the coming into force of that provision, shall not be construed as a reference to the coming into force of that provision as originally enacted. Mr. Balakrishnan tried to raise the argument that a landholder is, in any event, entitled to the benefit of the exemption under section 81 as amended by the Act of 1969 in respect of the "extent of plantation within the ceiling area" even if it were converted into a plantation during the period April 1, 1964 to December 31, 1969. The argument is untenable because while sub section (1) of section 81 provides that the provisions of Chapter III shall not apply to the lands and plantations mentioned in it, that is overridden by, and is subject to, the requirement of sub section (4) of section 82. Point No. 1 is decided against the appellants. Point No. 2 The question is whether a certificate of purchase issued by the Land Tribunal under section 72K of the Act is binding on the Taluk Land Board in proceedings under Chapter III of the Act. The provisions relating to the purchase of the landlord 's rights by cultivating tenants appear under that heading, and are contained in sections 53 to 74 of the Act. The Tribunal is competent to pass orders on the application for purchase, including the determination of the compensation and the purchase price under section 72F. Section 72K 860 provides for the issue of the certificate of purchase sub section (2) of that section reads as follows, "(2) The certificate of purchase issued under sub section (1) shall be conclusive proof of the assignment to the tenant of the right, title and interest of the land owner and the intermediaries, if any, over the holding or portion thereof to which the assignment relates. " The real question for consideration therefore is whether the certificate is binding on the Taluk Land Board for the purpose of taking a decision in regard to the ceiling area under sub section (5) of section 85. It may be mentioned in this connection that while the Land Tribunal deals with most of the matters relating to tenants and is constituted under section 99, the Taluk Land Board is constituted under section 100A and deals with statements filed under sub section (2) of section 85 by persons owning or holding land in excess of the ceiling area. Sub section (5) of section 85 provides further that the Taluk Land Board shall (a) cause the particulars mentioned in the statement to be verified, (b) ascertain whether the person to whom the statement relates owns or holds any other lands, and (c) by order determine the extent and identity of the land to be surrendered. A reading of sub section (1) of section 85 shows that the question for examination is not that relating to the existence of the tenancy rights of the person who files the statement, but that relating to the bona fides of his belief that the land sought to be excluded by him is liable to be purchased by a cultivating tenant. The Land Tribunal and the Taluk Land Board thus operate in their respective fields and serve the purpose of the Act. Now the certificate of purchase which the Land Tribunal issues (in the prescribed form) evidences the "assignment" of the assigned land to the purchaser. Sub section (2) of section 72K of the Act mentioned above merely declares that the certificate shall be conclusive proof of that 'assignment ' of the right, title and interest of the land owner and the intermediaries (if any) to the tenant in respect of the holding concerned (or portion thereof). There is nothing in the sub section which could be said to declare that the finding recorded 861 by the Tribunal in those proceedings would be conclusive proof of any other matter which it may determine so as to bind the Taluk and Board or any other authority. Sub section (2) of section 72K therefore does not, in terms or in substance, impinge on the authority of the Taluk Land Board to discharge its own functions under section 85(5) of the Act. The Board is thus quite free to cause the particulars mentioned in the statement filed under sub section (2) of section 85 to be verified and to ascertain whether the person filing the statement owns or holds any other land, and to determine the "extent" as well as the "identity" of the excess land which he is required to surrender. If a certificate of purchase is issued by the Land Tribunal to any such person and he tenders it in proceedings before the Taluk Land Board, the Board is required by law to treat it as conclusive proof of the fact that the right, title and interest of the land owner (and intermediary) over the land mentioned in it has been assigned to him. It is however not the requirement of the law that the certificate of purchase shall be conclusive proof of the surplus or other land held by its holder so as to foreclose the decision of the Taluk Land Board under sub section (5) of section 85. Mr. Warriyar is not justified in arguing that the Taluk Land Board has power only to determine the "identity" of the surplus land, leaving every other matter to the Land Tribunal. The argument loses sight of requirement of sub section (5) of section 85 that the Board shall, inter alia, by order, determine not only the "identity" of the land to be surrendered but also its "extent". It would thus appear that even though the certificate of purchase issued under sub section (1) of section 72K is conclusive proof of the assignment of the right, title and interest of the landowner in favour of the holder in respect of the holding concerned under sub section (2), that only means that no contrary evidence shall be effective to displace it, unless the so called conclusive effective is inaccurate on its face, or fraud can be shown (Halsbury 's Laws of England, fourth edition, vol. 17, page 22 paragraph 28). It may be stated that "inaccuracy on the face" of the certificate is not as wide in its connotation as an "error apparent on the face of the record". It will not therefore be permissible for the Board to disregard the evidentiary value of the certificate of purchase merely on the ground that it has not been issued on a proper appreciation or consideration of the evidence on record, or that the Tribunal 's finding suffers from any procedural error. What sub section (2) of section 72K provides is an irrebutable presumption of law, and it may well be regarded as a rule 862 of substantive law. But even so, for reasons already stated, it does not thereby take away the jurisdiction of the Taluk Land Board to make an order under section 85(5) after taking into consideration the "conclusive" evidentiary value of the certificate of purchase according to section 72K (2) as far as it goes. We are therefore of the opinion that the view taken in Kunjanujan Thampuran and others vs Taluk Land Board(1) is not quite correct. While the High Court was justified in taking the view that the scope of the enquiry in the Taluk Land Board is that relating to the surplus land with which the Land Tribunal is not concerned, the certificate of purchase has its own "conclusive" evedentiary value to the extent provided in section 72K (2) in proceedings before the Taluk Land Board. It will therefore be for the Board to arrive at its own decision under sub section (5) of section 85, according to the law, and it will be permissible for it to examine, where necessary, whether the certificate is inaccurate on its face, or has been obtained by fraud or collusion. Point No. 2 is decided accordingly. Mr. Bhandare tried to raise an ancillary argument in C.A. No. 2585 of 1977 that if on the date on which the Taluk Land Board undertakes an enquiry for the determination of surplus land, a proceeding is pending before the Land Tribunal for the grant of a certificate of purchase, the Board will have no jurisdiction to examine a matter which falls within the jurisdiction of the Tribunal. We find, however, that no such question was raised for the consideration of the High Court, where the controversy was confined to the genuineness of the lease, and we are therefore not required to examine the abstract point of law set out by Mr. Bhandare. It will be sufficient for us to say that the ancillary argument can easily be answered in the light of our decision on point No. 2 if and when it arises for consideration in a given case, for the function of the Board is to determine the extent and the identity of the Land to be surrendered and not matters relating to the issue of a certificate of purchase. If a certificate of purchase has a bearing on what the Board is called upon to decide, we have no doubt that the Board will take it into consideration, if it is produced for its consideration, with due regard to the evidentiary value assigned to it under section 72K (2) in the light of our decision on point No. 2. Point No. 3 Some of the persons who owned or held lands exceeding the ceiling prescribed by the Act, had voluntarily transferred some of their lands after the publication of the Kerala Land Reforms Bill, 1963, in the 863 State Gazette on September 15, 1963. Section 84 of the Act therefore provides that, except for the transfers mentioned in the section, the transfers so made shall be deemed to be transfers calculated to defeat the provisions of the Act, and shall be invalid. The section has thus been linked with section 82 which specifies the ceiling area. As has been stated, the ceiling area was considerably reduced by the amendment which was made in section 82 by the Amending Act of 1969. That Act amended section 84 also, with effect from January 1, 1970. It was again amended by Act 17 of 1972 (hereafter referred to as the Amending Act of 1972) with effect from November 2, 1972, when that Act came into force. It, inter alia, inserted sub section (3) in section 84 as follows, "(3) For the removal of doubts, it is hereby clarified that the expression "ceiling area" in sub sections (1) and (2) means the ceiling area specified in sub section (1) of section 82 as amended by the Kerala Land Reforms (Amendment) Act, 1969, (35 of 1969). " The question therefore is whether the validity of the voluntary transfer is to be determined with reference to the ceiling area in force on the date of transfer, or the reduced ceiling area prescribed by the Amending Act of 1969. As has been stated, sub section (3) of section 84 was inserted on November 2, 1972, and the point for determination is whether it was retrospective or retroactive in operation so as to govern the transfers effected after September 15, 1963 (date of publication of the Bill of 1963) even though the original section 84, read with the original section 82, invalidated only those transfers which were in excess of the higher ceiling prescribed by the original section 82. Section 84 follows section 82 which, it will be recalled, prescribes the ceiling area, and section 83, which prohibits the owning or holding or possession (under a mortgage) land in excess of the ceiling area. As has been observed by this Court in Gangadharan 's case, section 84 has been enacted with a view to making the provisions of section 83 and 85 effective. It makes references to "ceiling area" in sub sections (1) and (2), and sub section (3) states what exactly is meant thereby. The sub section clarifies that the expression "ceiling area" in sub sections (1) and (2) of section 84 means the area specified in sub section (1) of section 82 "as amended by the Kerala Land Reforms (Amendment) Act, 1969 (35 of 1969)". As has been mentioned, that amendment was made by section 66 which came into force on January 1, 1970. It is true that section 15 of the Amending Act of 1972 (which inserted sub section (3) in section 84 of the Act) does 864 not state that it has been made with retrospective effect, and sub section (3) does not, in terms, state that it shall be deemed to have come into force from the date of the amendment which was made by the Amending Act of 1969. Even so, it is necessary to examine the true effect of the insertion of the sub section and to decide whether it is retroactive. In doing so, we shall be guided by the plain and clear language of the sub section, that is the primary rule of construction, for the legislature is intended to mean what it has expressed. We shall also bear in mind the other equally important rule of interpretation that a statute is not to be read retrospectively except for necessity. Section 84 has been enacted for the purpose of making certain voluntary transfers invalid on the ground that they are deemed to be calculated to defeat the provision of the law relating to imposition of ceiling on land. It is therefore co related to section 82 (which fixed the ceiling), and if the Legislature decided that the ceiling should be reduced, it is natural that the deeming provision of section 84 should attach to transfers in excess of the reduced ceiling because the crucial date of invalidation has been stated in section 84, right from the inception of the Act, to be September 15, 1963, irrespective of the law relating to the ceiling. It will be remembered that the Act had not even come into force on September 15, 1963, but it, all the same, invalidated the transfers made after that date in excess of the ceiling it prescribed. So, as long as September 15, 1963 continues to remain the date with reference to which the transfers are to be invalidated, the variation in the extent of the ceiling has necessarily to work back to that date. The legislature therefore inserted sub section (3) in section 84 to clarify that the expression "ceiling area" in the earlier sub sections would mean the ceiling area specified in section 82(1) as amended by the Amending Act of 1969, i.e. the reduced ceiling. In taking this view we have only taken into consideration the plain and clear wordings of the sub section, and if in doing so it so happens that sub section (3) becomes retroactive in operation, we must hold that it is so. Any other view of the meaning and effect of sub section (3) will amount to disregarding what the legislature has expressed and reading more in the law than what it provides. It has to be appreciated that, from the inception, the Act forward on voluntary transfers effected after September 15, 1963, for the obvious reason that the Bill was published on that date in the State Gazette and those concerned know that they would be required to surrender the excess lands. It is not surprising that voluntary transfers of land should have been made to get over that eventuality. 865 Section 84 therefore provided from the very beginning that such transfers shall be deemed to be calculated to defeat the provisions of the Act and shall be invalid. When the ceiling fixed by the original section 82 was considerably reduced by the Amending Act of 1969, and when the reduced ceiling was to govern the liability to surrender the excess land, it was only natural that provision should have been made to invalidate voluntary transfers effected after September 15, 1963 with reference to that reduced ceiling. It has to be appreciated that even those who did not want to defeat the provisions of the Act by voluntary transfers after September 15, 1963 and retained the lands themselves, were affected by the amendment which was made by the Amending Act of 1969 and were not entitled to claim that this should not be so merely because the Amending Act came into force later. A doubt was however raised about the matter in V. N. Narayanan Nair and others vs State of Kerala and others(1). It was therefore considered necessary to introduce the Kerala Land Reforms (Amendment) Bill, 1972, clause 15 of which, inter alia, provided for the insertion of the following as sub section (3) of section 84 of the Act, "(3) For the removal of doubts it is hereby clarified that the expression "ceiling area" in sub sections (1) and (2) means the ceiling area specified in sub section (1) of section 82 as amended by the Kerala Land Reforms (Amendment) Act, 1969 (35 or 1969). " Notes on clauses were appended to the Bill. In paragraph 10 thereof it was stated as follows: "There have been some doubts as to the scope of the expression "ceiling area" as used in the section. It is proposed to provide that the ceiling area referred to in the section is the ceiling area under the principal Act as amended by the Kerala Land Reforms (Amendment) Act, 1969 (35 of 1969). " The legislature inserted the sub section without any change. It is true that the intention of the legislature cannot be ascertained from any statement by way of a note on the clauses of a Bill or breviate and, as has been stated, the duty of the court is to find the natural meaning of the words in a statute, in the context in which they are used, but it has always been considered permissible, and even desirable, for a court, while interpreting a statute, to take note of the history of the statute and the circumstances in which it was passed or 866 the mischief at which it was directed. The reason is that the meaning which is to be given to a statute should be such as will carry out its object. If sub section (3) of section 84 is examined with due regard to all these factors, it will appear that, as has plainly been stated in it, the "ceiling area" referred to in sub sections (1) and (2) of that section for examining the question of the validity of the transfers made after September 15, 1963 is the reduced "ceiling area" specified by the Amending Act of 1969. In fact as has been stated in the Craies on "Statute Law," seventh edition, at page 395, to explain a former statute, the subsequent statute has relation back to the time when the earlier Act was passed. In such a case, as the Act is "declaratory", the presumption against construing it retrospectively so as to respect vested rights, is not applicable. As sub section (3) of section 84 in terms clarifies the meaning of the expression "ceiling area" with reference to which certain voluntary transfers are to be invalidated, it is clearly retrospective as it is meant to invalidate the transfers made after September 15, 1963 when the Bill of 1963 was published. We are therefore satisfied that the view taken in Narayana Patar vs State of Kerala(1) and others in this respect is quite correct and point No. 3 is decided accordingly. In the result, the appeals in which only points Nos. 1 and 3 have been raised for our consideration fail and are dismissed. We shall now examine those appeals in which point No. 2 and/or additional points have been raised for our consideration. C.A. No. 869 of 1979 Issac Joseph and another vs State of Kerala and others As we have taken a different view on point No. 2, and as the purchase certificate came up for consideration in the High Court, the appeal is allowed to the extent that the High Court shall re examine the matter in the light of our decision on that point. C.A. No. 876 of 1979 P. Kunhukutta Tharakan and others vs State of Kerala and others Mr. Warriyar has argued that the High Court has committed an error of law in taking the view that the certificate of purchase was not 867 conclusive proof of the assignment of the right, title or interest of the landowner and the intermediaries over the holding. In view of our decision on point No. 2, it is necessary that the High Court should re examine the controversy. The appeal is therefore allowed, and it is ordered accordingly. C. A. No. 877 of 1979 K. Parukutty Ammal vs State of Kerala and others In the view we have taken on point No. 2 about the evidentiary value of the certificate of purchase, the appeal is allowed and the case is sent back to the High Court for fresh disposal according to law in that respect. C.A. No. 878 of 1979 K. Devaki Amma and others vs State of Kerala and others The view taken by the High Court in regard to the evidentiary value of the purchase certificate is not correct for reasons mentioned by us while dealing with point No. 2. The appeal is therefore allowed to this extent and the High Court shall re examine its decision in this respect. C.A. No. 879 of 1979 C. section Raman Mannadiar vs State of Kerala and others While examining revision petition No. CRP No. 4988/76 C, certificates of purchase came up for consideration in the High Court. In view of our decision on point No. 2, it will be necessary for the High Court to re examine the matter. The appeal is allowed to this extent and it is ordered accordingly. C.A. No. 2623 of 1977 P. Kunhilakshmi Amma vs The Taluk Land Board, Talappily and another Mr. Warriyar has argued that the appellant is a widow and that the ancestral lands have wrongly been treated as her own lands. We 868 have gone through the judgment of the High Court but no such point was raised for its consideration. It cannot be allowed to be raised now and as no other point has been argued in this Court, the appeal fails and is dismissed. C.A. No. 1015 of 1976 Chettiam Vettil Ammad and another vs The Taluk Land Board, Badagar and others It has been argued by Mr. Warriyar that a child in the womb on January 1, 1970 is a member of the family for purposes of section 82(1) (c) of the Act and the contrary view taken by the High Court on the basis of its decision in Balakrishna Kurup vs State of Kerala and another(1) is incorrect and should be set aside. Clause (c) of sub section (1) of section 82 of the Act provides that in the case of a family consisting of more than five members, the ceiling area of the land shall be ten standard acres increased by one standard acre for each member in excess of five, subject to the limit prescribed by the clause. The expression "family" has been defined in clause (14) of section 2 as follows: "family ' means husband, wife and their unmarried minor children or such of them as exist". And the expression "minor" has been defined by clause (36A) to mean "a person who has not attained the age of eighteen years. " So two postulates are necessary for obtaining the benefit of the increase of one standard acre for each member of the family in excess of five, namely, that the member should be in existence, and it should be possible to ascertain that he had not attained the age of eighteen years on the appointed date. Both these conditions cannot be said to exist in the case of a child en ventre sa mere and it will not therefore be regarded as a member of the family for purposes of section 82. We are aware that a child en ventre sa mere has been regarded in some legal systems as a person "in being" for the purpose of acquisition of property by the child itself, particularly in regard to gifts, but section 82 of the Act with which we are concerned does not deal with any such contingency or benefit to the unborn child. The view taken by the High Court in Balakrishna Karup case is therefore correct and as it has been rightly followed in the appeal before us, the appeal has no merit and is dismissed. 869 C.A. No. 1863 of 1977 C. A. Venkatachallam Chettiar vs Taluk Land Board, Chittor and another It has been argued by Mr. Warriyar that the lands in question should have been treated as joint family property and if that had been done there would have been no excess land for surrender. The claim was advanced on the basis of parol evidence and was rejected by the High Court. It is therefore a finding of fact and does not call for re examination here. The appeal fails and is dismissed. C. A. No. 40 of 1977 E. V. Paul vs The Taluk Land Board, Talappilly and another. It is not disputed that there is a pine apple canning factory on 2.15 acres, and there is a pine apple plantation on the adjoining area of 11 acres. It has been argued that the whole of 13.15 acres should have been exempted from the ceiling limit as it was a commercial site within the meaning of section 2(5) of the Act. But, according to that definition, "commercial site" means (leaving out the inapplicable portion) any land which is used "principally for the purposes of any trade, commerce, industry, manufacture or business. " A cross reference to sub section (5) of section 101 shows that such a question has to be decided after taking into account the extent of, the amount invested in, and the income from, the portion so used and the remaining portion and the other relevant matters. It has been held that the 11 acres of land did not fall within this definition and the finding of fact that it is not a commercial site does not call for interference. The appeal fails and is dismissed. C.A. No. 2585 of 1977 P. J. Vetrivel vs State of Kerala and others We have made a reference to this appeal in connection with the ancillary argument of Mr. Bhandare on point No. 2. It has been argued further that although 1.50 acres was given on lease to the other appellant who held a certificate of purchase, the High Court ignored the parole evidence and the certificate of purchase. We find however that the High Court did not interfere with the finding of the Taluk Land Board because there was no lease deed and there was "absolutely no material" to prove that the land was held by the tenants. The two "demand bills" of the Panchayat dated November 1, 1974 could not possibly prove that a lease was in existence before September 15, 870 1963. There is nothing on the record to show that a certificate of purchase was produced for the Board 's consideration, and it is futile to argue that its evidentiary value was ignored by the Board. No such argument was advanced for the consideration of the High Court. The other argument regarding exclusion of 1.75 acres, on the basis of an alleged gift to the appellant 's son, was not urged for the consideration of the High Court; and does not require consideration by us. The appeal is dismissed. C.A. No. 2811 of 1977 Jaya Shree Tea and Industries Ltd. vs Taluk Land Board, Nedumangad and others Mr. Bhatt has argued that the High Court erred in not granting the exemption for the entire area as a coffee plantation; but the finding of fact in this respect is against the appellant. The conversion of the land has also been held to be illegal. On the claim that the land used for growing fuel was exempt as it fell within the definition of "plantation" under section 2(44) (a) as it was an "ancillary purpose" also, there is a finding of fact against the Company. The appeal has no merit and is dismissed. C.A. No. 227 of 1978 The Taluk Land Board Peermade and others vs Southern India Tea Estates Co. Ltd. The controversy before us relates to exclusion of "fuel area" and "rested area" The Company has claimed that it has planted red gum as fuel in 924.01 acres as it was required for the "manufacture of tea." The Taluk Board found it to be an exorbitant claim and reduced it to 200 acres, but the High Court has restored the entire claim. The General Manager of the Company has stated that fire wood is being supplied to the employees free of cost. So the claim to plant red gum all over is belied by its General Manager 's statement. Moreover supply of fuel wood cannot be said to be a purpose "ancillary to the cultivation of plantation crops. " The Land Board has disallowed the claim for exemption of 136.17 acres, but it has been allowed in full by the High Court. Here again the High Court was not justified in interfering with the Board 's finding of fact for there was nothing to show that it was an area from which crop was not gathered at the relevant time. If that had been so, it might have been an area within the plantation. In fact it appears from the order of the Board that no 871 other estate had made any such claim. The appeal is therefore allowed to the extent that the Board 's decision is restored in both these matters. C.A. No. 1309 of 1977 V. G. Kuriakose, Vadakkekara House, vs The Taluk Land Board and others Mr. Raghavan has argued that the Land Board erred in excluding only 25 cents on account of road and 55 cents for the house site and the approach road. These are findings of fact which have not been shown to be vitiated by any error of law or procedure and the High Court has given its reason for refusing to take additional evidence in regard to the alleged dedication of the road. The appeal has no merit and it is dismissed. C.A. No. 2070 of 1977 Subhadra vs The State of Kerala and others The appellant has been called upon to surrender 8.75 acres of land and the claim to exclude 6.29 acres on account of a will of 1963 in favour of the grand daughter has been rejected as the will has not been found to be genuine. Mr. Raghavan has not been able to show how that finding, which is essentially one of fact, can be said to require reconsideration when it is admitted that the will has not been probated so far. The appeal is without merit and is dismissed. C.A. No. 143 of 1977 P. A. Sivasubramaniam vs The State of Kerala and others Mr. Raghavan has argued that the High Court has erred in rejecting the contention that as the appellant had two unmarried daughters who had attained majority before January 1, 1970, they were entitled to 6 acres each under section 82(1) of the Act. But the two daughters did not have any share in the property under their personal law, and the Act did not give it to them. The High Court cannot be blamed for rejecting the claim, and the appeal is dismissed. 872 C.A. No. 882 of 1978 Dr. T. R. Chandrasekhar vs The Taluk Land Board and others The High Court has remanded the case in some respects, but the grievance here is that although the appellant 's unmarried daughter Sheela became a major in 1969 and was given a share in the partition held on December 15, 1969, that has not been excluded from the appellant 's holding. We find that there was no satisfactory evidence to prove the partition and separate possession of the daughter. The finding of fact is therefore against the appellant and does not call for reconsideration here. The appeal is dismissed. C.A. No. 883 of 1979 Smt. Unneema Antherjanam vs The Taluk Land Board and others The grievance of the appellant is that the Taluk Land Board has revised its earlier order and raised the excess land for surrender from 7.66 acres to 11.09 acres. But that is permissible under section 85(9) of the Act. The Board has justified the correction with reference to the reports already on the record and it has not been argued before us that they were not read correctly or that that excess land has been incorrectly determined. It may be mentioned that the Collector and the Tahsildars were authorised under section 105A (1) to make the reports which were lost sight of when the first determination of surplus land was made, and all that the Board has done is to rectify the mistake. There is no merit in this appeal and it is dismissed. C.A. No. 362 of 1978 Mammad vs The State of Kerala and others It has been argued by Mr. Harindranath that Mammad son of Mohammad Kutty was a major on January 1, 1970 and he was wrongly taken to be a minor for the determination of the ceiling area. But we find from the High Court 's order dated July 5, 1976 that Mohammad Kutty had himself mentioned in the statement which he filed about his holding that his son Mammad was a minor on that date. It is therefore clear that the attempt to show that he was a major on January 1, 1970 was an after thought, and it has rightly been rejected. The appeal is dismissed. 873 C.A. No. 881 of 1979 Kodoth Krishnan Nair vs The Taluk Land Board, Kasargod and others Mr. Harindranath has argued that the house, cattleshed, tank, well and outhouse should have been exempted. But no such argument was advanced in the High Court and it cannot be agitated here. The other argument that the land which was on lease with C. Ouseph should have been allowed to be surrendered, is also futile in view of the findings about the alleged lease. The appeal is dismissed. C.A. No. 2587 of 1977 Thomas Kuriyan vs The Tahsildar, Taliparamba Taluk, and others It has been argued that out of the 30 acres of land which was taken on lease on May 2, 1962, from Haji, one Palakkat Varkey was in possession of 13 acres which he refused to surrender and that land should have been left out of consideration. It has however been found as a fact that the alleged tenancy of Varkey had not been established, and there is nothing wrong if the plea to that effect has been rejected. The appeal is dismissed. C.A. No. 895 of 1979 Kuttikrishnan and another vs The State of Kerala and others We have dealt with the evidentiary value of the purchase certificate while examining point No. 2 which has a bearing on this appeal. The appeal is therefore allowed and the case is sent back to the High Court for fresh disposal in this respect, according to the law. C.A. No. 894 of 1979 K. Kesava Pillai vs The State of Kerala and another The only argument which has been advanced before us relates to the question whether the finding about unculturable waste land is correct. That is a finding of fact which has not been shown to have been vitiated for any reason. The appeal is dismissed. 874 C.A. No. 870 of 1979 Kurian Thomas vs The State of Kerala and others It has been argued by Mr. Sudhakaran that although certificates of purchase had been obtained by some of the tenants, they were not taken into consideration by the Land Board and the High Court. We find that no such argument was advanced in the Board or before the High Court and, as it happens, there is nothing to show that even the existence of the certificate of purchase was brought to the notice of the Board or the High Court. All that was urged in the High Court was that out of 30 acres acquired in 1962, the appellant got possession of only 17 acres, and that there was a lease of some land in favour of Avirah Joseph in 1962. These were questions of fact which the High Court rightly refused to re examine. There is no merit in this appeal and it is dismissed. C.A. Nos. 873 and 874 of 1979 Kandu vs The State of Kerala and others The controversy relates to the three gift deeds executed after January 1, 1970. The High Court has refused to exclude the gifted lands, and in view of this Court 's decision in Gangadharan 's case, (supra) that decision is correct as transfers made after January 1, 1970 have to be ignored even if they are of the excepted variety mentioned in section 84 of the Act. The appeals fail and are dismissed. C.A. No. 875 of 1979 T. Devidas and others vs Taluk Land Board, Talappilly and others It has been argued by Mr. Rammurthy that the High Court erred in upholding the Taluk Land Board 's view that the properties received by the deceased Nanikutty Amma under the partition deed of 1117 belonged to her exclusively as the property really belonged to the "tavazhi" consisting of herself, her daughter and the lineal descendants. The High Court has examined the document concerned and held that the properties were private properties of the executants of the document. This is a finding of fact and there is nothing wrong with the view that the property which fell to Nanikutty 's share was her own property. There is no merit in the appeal and it dismissed. 875 C.A. No. 1019 of 1979 P. V. Thomas vs The State of Kerala and others. The appellant was directed by the Taluk Land Board to surrender 18.93 acres of land. His grievance was that the land in R.S. No. 1/2 was a private forest until it was converted into rubber plantation. The Board held that the conversion took place after April 1, 1964. As in a document of December 12, 1963 the land was a private forest, the High Court remanded the case for further enquiry. The Board reexamined the evidence and found that there was satisfactory evidence to prove that the land was not a private forest as on April 1, 1964. The High Court has upheld that finding after examining the document of 1963. In view of that finding of fact, there is no merit in this appeal and it is dismissed. C.A. No. 890 of 1979 K. C. Thomas vs The Taluk Land Board, Vaikam and others Mr. Nambiyar has argued that the High Court erred in upholding the finding of the Taluk Land Board that the land in question was not forest but "paramba" and its conversion into "plantation" after April 1, 1964 had to be ignored under section 82(4) of the Act. But that is a finding of fact, which has not been shown to have been vitiated, and does not call for interference here. The appeal is dismissed. C.A. No. 885 of 1979 K. P. Mohammad and others vs Taluk Land Board, Perinthalmanna and others The Taluk Land Board made its order on November 21, 1975 determining the extent of the land to be surrendered by the appellant. He applied to the Board much after the period of 60 days prescribed in sub section (8) of section 85 to have that order set aside. No real attempt was made to explain the delay and the High Court therefore rightly upheld the Board 's decision that the application was barred by limitation. The appeal fails and is dismissed. C. A. No. 886 of 1979 P. M. Kunhammed and another vs Taluk Land Board, Qulandy and others The Taluk Land Board 's earlier order was set aside by the High Court to the extent mentioned in its order dated November 16, 1976 and the Board was directed to dispose of the matter afresh. The Board allowed relief to the extent of 53.59 acres by exempting it as rubber 876 plantation. But it disallowed the claim that 3.41 acres was arecanut garden in a part of the rubber plantation as it was interspersed with in the boundary of the rubber estate, because it was found from the report of the authorised officer that this was not so. The High Court has given satisfactory reasons for that view and there is no occasion for us to interfere with that finding. The appeal fails and is dismissed. C. A. No. 903 of 1979 T. V. Krishnan vs The State of Kerala and others The main controversy was that relating to the date of birth of the daughter of the appellant. The Taluk Land Board has held that she was minor on January 1, 1970 and was a member of the appellant 's family. That finding has been based on the entries in the school certificate, and as a certified copy of the birth register was not produced, it cannot be said that the High Court erred in refusing to disturb the Board 's finding. The appeal is dismissed. C.A. Nos. 574 575 of 1978 Ravi Karuna Karan vs The Taluk Land Board, Quilon and others Special leave in these appeals has been granted "limited to the question of urban lands measuring 7.19 acres. " The Board gave its finding in this matter after making the necessary enquiries and "visiting" the lands. The High Court has stated in its order dated October 11, 1976 on the review petition that the question of "non applicability of the Act to non agricultural lands" was not urged for its consideration. As it is essentially a question of fact, it does not require consideration in this Court. The appeals fail and are dismissed. C. A. No. 2584 of 1977 Smt. Varghese Marium and another vs The Taluk Land Board and others The evidentiary value of the purchase certificate came up for consideration in this case in the High Court. In view of our decision on point No. 2, the appeal is allowed and the case is sent back to the High Court for fresh disposal in this respect according to law. 877 C. A. No. 2586 of 1977 P. M. Kuruvilla vs The State of Kerala and others In view of our decision on point No. 2, the appeal is allowed and the case is sent back to the High Court for fresh disposal according to the law in so far as the question of exclusion of 23.57 acres of land in Trikhadambe village is concerned. In the result C. A. Nos. 869/79, 876/79, 877/79, 878/79, 879/79, 224/78, 895/79, 2564/77 and 2586/77 are allowed to the extent mentioned above. All the other appeals fail and are dismissed. The parties are left to pay and bear their own costs.

The Kerala State Legislature felt the necessity of making comprehensive land reforms in the State. The Kerala Agrarian Relations Act, 1960 (Act IV of 1961) was accordingly passed and received the assent of the President on January 21, 1961. Some of its provisions were brought into force with effect from February 15, 1961. That Act was struck down as unconstitutional by this Court. The Kerala Ryotwari Tenants and Kudikidappukars Protection Act, 1962 was then passed for the temporary protection of tenants in those taluks. The Kerala High Court declared it null and void in its application to the ryotwari lands of the Malabar area and most of the lands of Travancore area. As an interim legislation, the Kerala Tenants and Kudikidappukars Protection Act 1963 was passed to provide some protection to the tenants. But it repealed the Kerala Ryotwari Tenants and Kudikidappukars Protection Act, 1962, and suspended the operation of the Kerala Agrarian Relations Act, 1960. After re examining the requirements in the field of land reforms as a whole, the Kerala Land Reforms Bill, 1963 was published in the State Gazette on Sept. 15, 1963. It covered a wide field in the matter of land reforms and, inter alia, provided for the imposition of a ceiling on `holdings ' of lands, the surrender of excess of lands, grant of compensation thereof, and the assignment of the surrendered lands in accordance with the order of priority mentioned in the Bill, collection of purchase price, constitution of Land Tribunals etc. The Land Reforms Act 1963 (Act 1 of 1964) received the assent of the President on Dec., 31, 1963. It was amended extensively, and in several material particulars by Act, 35 of of 1971 and Act 17 of 1972. The following three main points of controversy arose in the appeals : 1. Whether lands converted into plantations between April 1, 1964 and January 1, 1970 qualified for exemption under section 81(1)(e) of the Act. Whether a certificate of purchase issued by the Land Tribunal under section 72K of the Act was binding on the Taluk Land Board in proceedings under Chapter III of the Act. Whether the validity or invalidity of transfers effected by persons owning or holding lands exceeding the ceiling limit could be determined with reference to the ceiling area in force on the date of the transfer or in accordance with the ceiling area prescribed by Act 35 of 1969 whether sub section (3) of section 84 was retrospective in operation. ^ HELD : Point No. 1. The controversy is whether the restriction of sub. section (4) of section 82 came into force on January 1, 1970, because section 12 of the amending Act of 1971 was brought into force on that date, or 840 whether it came into force on April 1, 1964, when section 82 as originally enacted came into force. [853H, 854G] All the three Acts contain provisions about their "commencement". Subsection (3) of section 1 of the Act provides that : (i) Section 1 of the Act shall come into force at once, (ii) the other provisions of the Act shall come into force on such dates as the Government may appoint, (iii) different dates may be appointed for different provisions of the Act, and (iv) any reference in any such provision to the "commencement of this Act" shall be construed as a reference to the coming into force of that provision. The Act was published in the Gazette on January 14, 1964, and, by virtue of section 3 of the Kerala Interpretation and General Clauses Act, section 1 came into force on that date. Sec. 82, as has been stated, came into force on April 1, 1964, and the reference in sub section (4) of that section to the "commencement of this Act" meant a reference to the coming into force of that provision with effect from April 1, 1964. It may be that the first three rules or directions contained in sub section (3) were spent on the coming into force of sec. 1 of the Act or its other provisions on the dates appointed for them, but, for obvious reasons, rule (iv) continued to hold the field inasmuch as it laid down the rule of construction that any reference to the commencement of the Act shall be construed as a reference to the coming into force of that particular provision. It was therefore applicable as a general rule of construction whenever it became necessary to ascertain the date of commencement of a particular provision of the Act other than section 1. [854G, 855B F] Sub section (4) of section 82, as originally incorporated in the Act, came into force on April 1, 1964. It was amended by section 66 of the Amending Act of 1969, which came into force on January 1, 1970, but that proved to be fortuitous and was supplanted by section 12 of the Amending Act of 1971 from the same date. The sub section as amended by the Amending Act of 1971 also dealt with the conversion of land into any other class of land "after the commencement of this Act", but it added the words "or into a plantation" and provided that such conversion shall not be taken into consideration for determining the extent of the land to be surrendered. [855F H] On the plain meaning of the proviso to sub section 3 of section 1, it follows that when the provision of sub section 4 of section 82 was brought into force on April 1, 1964, its amended version also came into force from that date. [856B, E] No particular significance attaches to the use of the expression "provisions" or "provision" in section 1(3) of the Act. A provision is a distinct rule or principle of law in a statute which governs the situation covered by it. So an incomplete idea, even though stated in the form of a section of a statute, cannot be said to be a provision for, by its incompleteness, it cannot really be said to provide a whole rule or principle for observance by those concerned. A provision of law cannot therefore be said to exist if it is incomplete, for then it provides nothing. [856G, 857C D] The amended section 82 of the Act is a distinct rule or a clause for it provides the extent of the ceiling area in the cases mentioned in it, its effect on the lands owned or held individually by members of a family or jointly 841 by some or all the members of the family, the taking into account of the shares of the members of the family or an adult unmarried person, the effect of conversion of any class of land into any other class of land specified in the Schedule or into a plantation and the extent of land liable to be surrendered, lands covered by a private trust or a private institution and exemption of land covered by section 81(6). The section is therefore a "provision" by any standard as it states the law relating to the imposition of ceiling on land. It may well be stated that sub section (4) of section 82 is also a provision of the law by itself, for it lays down a distinct rule relating to conversion of land for observance by all concerned. [857D F, H, 858A] The view taken by the High Court in Ramunni Nair vs State of Kerala, , in regard to the meaning to be attached to the words "the commencement of this Act" is substantially correct and does not call for interference. [859B] There is no force in the other argument that a landholder is, in any event, entitled to the benefit of the exemption under section 81 as amended by the Act of 1969 in respect of the "extent of plantation within the ceiling area" even though it were converted into a plantation during the period April 1, 1964 to December 31, 1969. The argument is untenable because while sub section (1) of section 81 provides that the provisions of Chapter III shall not apply to lands and plantations mentioned in it, that is overridden by, and is subject to the requirement of, sub section (4) of section 82. [859D F] Reference made to Saidu Muhammed vs Bhanukuitan State of Kerala & Ors. vs Philomina etc. , , and State of Kerala & Ors. vs K. A. Gangadharan, ; Point No. 2. The question for consideration is whether the certificate of purchase issued by the Land Tribunal under section 72K of the Act is binding on the Taluk Land Board in proceedings under Chapter III of the Act for the purpose of taking a decision in regard to the ceiling area under sub section (5) of section 85. Sub section (1) of that section shows that the question for examination by the Board is not that relating to the existence of the tenancy rights of the person who files the statement under sub section (2), but that relating to the bona fides of his belief that the land sought to be excluded by him is liable to be purchased by a cultivation tenant. The Land Tribunal and the Taluk Land Board thus operate in their respective fields for the purpose of the Act. [860 B, E G]. Sub section (2) of section 72K merely declares that the certificate of purchase shall be conclusive proof of the "assignment" of the right, title and interest of the landowner and the intermediary (if any) to the tenant in respect of the holding concerned. There is nothing in the sub section to require that the finding recorded by the Tribunal in those proceedings would be conclusive proof of any other matter so as to bind the Taluk Land Board or any authority. Sub section (2) of section 72K therefore does not impinge on the authority of the Taluk Land Board to discharge its own functions under section 85(5). [860G H, 861A B] As such the Board is quite free to cause the particulars mentioned in the statement to be verified, and to ascertain whether the person filing it owns or holds any other land, and to determine the "extent" as well as the "identity" of the excess land which he is required to surrender. In that sphere of work, 842 the certificate of purchase is not required by law to be conclusive proof in regard to the surplus or any other land held by its holder so as to foreclose the decision of the Taluk Land Board under sub section (5) of section 85. [861B D] Moreover, although the certificate of purchase is conclusive proof in respect of the matters stated in section 72K(2), that only means that no contrary evidence shall be effective to displace it, unless the so called conclusive evidence is inaccurate on its face, or fraud can be shown (Halsbury 's Laws of England, fourth edition, vol. 17, page 22 paragraph 28). "Inaccuracy on the face" of the certificate is not as wide in its connotation as an "error apparent on the face of the record". It will therefore not be permissible for the Board to disregard the evidentiary value of the certificate of purchase merely on the ground that it has not been issued on a proper appreciation or consideration of the evidence on record, or that the Tribunal 's finding suffers from any procedural error. What sub section (2) of section 72K provides is an irrebutable presumption of law, and it may well be regarded as a rule of substantive law. But even so, it thereby does not take away the jurisdiction of the Taluk Land Board to make an order under section 85(5) after taking into consideration the "conclusive" evidentiary value of the certificate as far as it goes. [861E H, 862A] The view taken in Kunianujan Thampuran & Ors. vs Taluk Land Board, is thus not quite correct. [862B] Point No. 3. Some of the persons who owned or held lands exceeding the ceiling prescribed by the Act, had voluntarily transferred some of their lands after the publication of the Kerala Land Reforms Bill, 1963, in the State Gazette on September 15, 1963. Section 84 of the Act therefore provides that, except for the transfers mentioned in the section, the transfers so made shall be deemed to be transfers calculated to defeat the provisions of the Act, and shall be invalid. The section has thus been linked with section 82 which specifies the ceiling area, and has been so amended as to reduce that area considerably. The question is whether the validity of a voluntary transfer is to be determined with reference to the ceiling area in force on the date of the transfer, or the reduced ceiling area prescribed by the Amending Act of 1969. As has been observed by this Court in State of Kerala & Ors. vs K. A. Gangadharan, ; , section 84 has been enacted with a view to making the provisions of sections 83 and 85 effective. Section 15 of the Amending Act of 1972 (which inserted sub section (3) in section 84) does not state that it has been made with retrospective effect, and sub section (3) does not, in terms, state that it shall be deemed to have come into force from the date of the amendment which was made by the Amending Act of 1969. Even so, it is necessary to examine the true effect of the insertion and to decide whether it is retroactive. [862G H, 863A, D, G, H, 864A B] The primary rule of construction is that courts should be guided by the plain and clear language of the statute, for the legislature is intended to mean what it has expressed. It is an equally important rule of interpretation that a statute is not to be read retrospectively except for necessity. [864B] So construed, it is obvious that although the Act had not even come into force on September 15, 1963, it invalidated the transfers made after that date in excess of the ceiling area it prescribed. It follows therefore that so long as September 15, 1963 continues to remain the date with reference to which 843 the transfers are to be invalidated, the variation in the extent of the ceiling has necessarily to work back to that date. The legislature therefore inserted sub section (3) of section 84 to clarify that the expression "ceiling area" in the earlier sub sections would mean the ceiling area specified in section 82(1) as amended by the Amending Act of 1969, i.e. the reduced ceiling. [864D F] In taking this view the Court made a reference to the notes on clauses to the Amending Bill of 1972 and observed that while it was true that the intention of the legislature cannot be ascertained from any statement by way of a note on the clauses of the Bill or, brevet, and the duty of the Court is to find the natural meaning of the words in a statute in the context in which they are used, it has always been considered permissible and even desirable to take note of the history of the statute and the circumstances in which it was passed or the mischief at which it was directed. The reason is that the meaning which is to be given to a statute should be such as will carry out its object. So viewed, it appears that, as has plainly been stated in it, the "ceiling area" referred to in sub sections (1) and (2) of section 84 is the reduced ceiling area specified by the Amending Act of 1969. It is clearly retrospective, as it is meant to invalidate the transfers made after September 15, 1963 when the Bill of 1963 was published. [864F, 865G H, 866A B, C] The Court then examined some of the appeals separately and recorded its finding thereon. [866F 868 & 869, 879 877]. While examining civil appeal No. 1015 of 1976, the Court examined the question whether a child in the womb on January 1, 1970 was a member of the family for the purpose of section 82(1) (c) of the Act. It referred to the definition of the expression "family" in clause (14) of sec. 2 and of the expression "minor" as defined in clause (36A) and held that two postulates were necessary for obtaining the benefit of the increase of one standard acre for each member of the family in excess of five, namely, that the member should be in existence, and it should be possible to ascertain that he had not attained the age of 18 years on the appointed date. It was held that as both these conditions could not be said to exist in the case of a child en ventre sa mere, it would not be regarded as a member of the family for purposes of sec. 82 of the Act. [868D F].

Appeal No. 1825 of 1967. Appeal by special leave from the judgment and order dated the 18th May, 1967 of the Punjab and Haryana High Court in L.P.A. No. 158 of 1967. Naunit Lal and Lalit Kohli, for the appellant O.P. Verma, for the respondent The Judgment of the Court was delivered by ALAGIRISWAMI, J. The property in dispute in this appeal belonged to Wadhawa Singh, the father of the respondent. After his death in the year 1933 his widow, who succeeded to the estate, made a gift of the property in favour of her daughter, the respondent, in. April, 1933. The appellants filed a suit as reversioners to the estate of Wadhawa Singh questioning the gift. The suit was decreed and the decree was confirmed on appeal. After coming into force of the on 17 6 1956 the widow again made a gift of the same lands to the respondent. She died in 1963. The appellants then filed the suit, out of which this appeal arises, for possession of the lands alleging that the second gift was void. The Trial Court decreed their suit but on appeal the respondent succeeded in the first Appellate Court as well as the High Court on second appeal. There is no doubt that Wadhawa Singh 's widow had no right to male a gift of the property which she inherited from her husband in 1933 and the decree obtained by the appellants, who were reversioners to her husband 's estate would bind the respondent who was also a party, to that suit. The question then is whether the coming into force, of the Hindu succession Act and the subsequent gift made by the widow in favour of the respondent make any difference. Had not the widow made the gift to the respondent in 1933, she would have become an absolute owner of the property as a result of section 14 of the and the gift made by her subsequently in favour of the respondent could not have been questioned. But having made the gift in 1933 she was not in possession of the property inherited by her from her husband and, therefore, did not become a full owner, with the result that the subsequent gift made by her in favour of the respondent was of no effect. This point that unless the limited owner is in possession of the property section 14 does not apply has now been settled by decisions of this Court beyond dispute. What then is the effect of the provision of section 8 of the in the circumstances of this case. 'The Punjab High Court in its decisions in Banso vs Charan Singh (AIR 1961 Punjab 45), and Kuldip Singh vs Karnail Singh (AIR 1961 Punjab 573), where the facts 530 were similar to the present case, has taken the view that when a widow dies after the coming into force of the the next heir to her husband is to be determined in accordance with the law prevailing on the date of the death of the widow and not in accordance with the law prevailing at the time of the death of her husband and held that the daughter succeeded in preference to the reversioners. The Mysore High Court on the other hand in Kempiah vs Girigamma (AIR has held that on the death of the widow succession would be governed by the Hindu Law which was in force when the last mate holder actually died. The Patna High Court in Renuka Bala vs Aswini Kumar (AIR 1961 Patna 498) was disposed to take a similar view though the case before it was concerned with succession to the property of a female under s.15. The Madras High Court in Sampathkumari vs Lakshmi Ammal (AIR 1963 Madras 50) also took the view that in such circumstances section 8 of the would not apply. But the case before that Court was one where two widows who had succeeded to the estate of their husband were in possession, and therefore, section 14 was applicable. Lastly, we have the decision of this Court in Eramma vs Verrupanna In that case this Court after setting out the provisions of section 6 of the observed: "It is clear from the express language of the section that it applies only to coparcenary property of the mate, Hindu holder who dies after the commencement of the Act. It is manifest that the language of section 8 must be construed in the context of section 6 of the Act. We accordingly hold that the provisions of section 8 of the are not retrospective in operation and where a male Hindu died before the Act came into force i.e., where succession opened before the Act section 8 of the Act will have no application. " Interpreted literally this dicision would seem to accord with the decisions of all the other High Courts except the Punjab High Court. But it should be noticed that the problem that we are faced within the present appeal and in the cases before the Punjab and Mysore High Courts did not arise before this Court on the earlier occasion. The decisions of the Madras High Court and the Patna High Court are not directly in point. In the case before this Court the two women were in possession of property whose last male holder, who had died before coming into force of the , was their step son. They were not, therefore in legal possession of the properties of the last male holder. The question that had to be decided was whether because of the coming into force of the they were entitled to succeed under section 8, and the further question whether section 14 would be attracted as they were actually in possession. It was held that as they were not legally in possession s, 14 would not apply, It was in that context that it was said that where a male Hindu died before the; Act came into force i.e., where succession opened before the section 8 of the Act will have no application, The point that succession 531 might open not only when the male Hindu died but also subsequently again when a limited owner who succeeds him dies was not taken into account. There was no need and no occasion to consider such a contingency in that case. There was the further fact that the last male holder was succeeded on his death by persons who were then. his nearest heirs and the property vested in them could not be divested by the coming into force subsequently thought this fact was not adverted to in the judgment. This Court had, therefore. also no occasion to consider the effect of the earlier decisions on the question as to what happens when a female limited owner, whether she is a widow, mother or daughter who succeeds the last male bolder, dies. That position may now be considered. It was authoritatively laid down by the Privy Council in its decision in Moniram Kolita vs Keri Kaliteni (ILR 5 Calcutta 776 at 789) that : "According to the Hindu Law, a widow who succeeds to the estate of her husband in default of male, issue, whether she succeeds by inheritance or survivorship as to which see the S hivagunga case (1) does not take a mere life estate in the property. The whole estate is for the time vested in her absolutely for some purposes, though in some respects for only a qualified interest. Her estate is an anomalous one, and has been compared to that of a tenant in tail. It would perhaps, be more correct to say that she holds an estate of inheritance to herself and the heirs of her husband. But whatever her estate is, it is clear that, until the termination of it, it is impossible to say who are the persons who will be entitled to succeed as heirs of the husband (2). The succession does not open to the heirs of the husband until the termination of the widow 's estate. Upon the termination of that estate the property descends to those who would have been the heirs at the husband if he had lived up 'to and died at the moment of her death (3). " In the subsequent decision in Duni. Chand vs Anar Kali (AIR the Privy Council observed: ". during the lifetime of the widow, the reversioners in Hindu Law have no vested interest in the estate but have a mere spes succession is or chance of succession, which is a purely contingent right which may or may not accrue,that the succession would not open out until the widow died, and that the person who would be the next reversioner at that time would succeed to the estate and the alteration in the rule of the Hindu Law brought about by the Act would then be in full force. (1) 9 Moore 's I.A., 604. (2) Id., 532 In the argument before their Lordships, reliance was placed upon the words "dying intestate" in the Act as connoting the future tense, but their Lordships agree with the 'view of the Lahore High Court in at p. 367, that the words are a description of the status of the deceased and have no reference and are not intended to have any reference to the time of the death of a Hindu male. The expression merely m eans "in the case of intestacy of a Hindu male". To place this interpretation on the Act is not to give a retrospective effect to its provisions, the materials point of time being the date when the ,.succession opens, namely, the death of the widow. On the position of reversioners in Hindu Law, opinions have been expressed by this Board from time to time with which the views of the learned Chief Justice in 58 All. 1041(2) mentioned above, are in agreement. It was said, for instance, that until the termination of the widow 's estate, it is impossible to say who are the persons who will be entitled to succeed as heirs to her husband; (3) at p. 604. The succession does not open to the heirs of the husband until the termination of the widow 's estate. Upon its termination, the property descends to those who would have been the heirs of the husband If he had lived uP to and died at the moment of her death 7 I. A. 115 (4) at 154. " It would be noticed that the Privy Council interpreted the words "dying intestate" as merely meaning "in the case of intestacy of a Hindu male" and said that to place this interpretation on the Act is not to give retrospective effect to its provisions. Those are the very words found in section 8. These may be contrasted with the words of section 6 "where a male Hindu dies after the commencement of this Act. " Here the reference is clearly to the time of the death. In section 8 it is only to the fact of intestacy. The material point of time, as pointed out by the Privy Council, is the date when the succession opens, namely, the death of the widow. It is interesting to note that the Privy Council was interpreting the provisions of the Hindu Law of Inheritance (Amendment) Act, 1929 where the two contrasting expressions found in the are not found. ' The case for the interpretation of the words "dying intestate" under the is stronger. The words "where a male Hindu dies after the commencement of this Act" in section 6 and their absence in section 8, are extremely significant. Thus two propositions follow: (1) Succession opens on the death of the limited owner. and (2) the law then in force would govern the succession. Now if this proposition is correct, as we hold it is, that where a female heir succeeds to an estate, the person 'entitled to succeed on the basis as if the last male holder had lived up to and died at the (1) Mt. Rajpali Kunwer vs Surju Rai (58 All. 1041). (2) Shakuntala Devi vs Kambsalya Devi (3) Katam Natchiar vs Rajah of Shiva Gunga , (4) Monirain Kolita vs Kerry Kolitang (7 IA 115: 533 death of the limited owner, succession to Wadhawa Singh 's estate in the present case opened when his widow died and it would have to, be decided on the basis that Wadhawa Singh had died in 1963 when his widow died. In that case the succession to his estate would have to, be decided on the basis of s.8 of the . The various High Courts which have held otherwise seem to have been oppre ssed by the feeling that this amounted to giving retrospective effect to section 8 of the whereas it is only prospective. As the Privy Council pointed out it means no such thing. The accepted position under the Hindu Law is that where a limited owner succeeds to an estate the succession to the estate on her death will have to be decided on the basis that the last full owner died on that day. It would be unreasonable to hold that in such a circumstance the law as it existed at the time when the last male holder actually died should be given effect to. If the person who is likely to succeed at the time of the limited owner 's death is not, as happens very often, likely to be the person who would have succeeded if the limited owner had not intervened, there is nothing unreasonable in holding that the law as to the person who is entitled to succeed on the limited owner 's death should be the law then in force and not the law in force at the time of the last full owner 's death. The Madras High Court thought that the decision of the Privy Council in Duni Chand vs Anar Kali (supra) was based upon a legal fiction and that fiction cannot be given effect to except for a limited purpose. The Mysore High Court also thought that the death referred to in section is actual death and not fictional death. In East end Dwellings Co., Ltd. vs Finsbury Borough Council 132) lord Asquith of Bishopstone observed :. "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so,. also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of those in this case is emancipation from the 1939 level of rents. The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs". This observation was cited with approval by this Court in Venkatachalam vs Bombay Dyeing & Mfg. Co., Ltd (1959 S.C.R. 703) If, therefore, succession opens and is to be decided on the basis of the last full owner dying on the date of death of the limited owner the inevitable corollary is that it is only the law in force at the time of the death of the limited owner that should govern the case. To hold that the old Hindu Law applies to such a case is to allow your imagination to boggle. In the case decided by the Privy Council in Duni Chand vs Anar Kali (supra) if this principle had been applied the new heirs 534 introduced by the Hindu Law of inheritance (Amendment) Act, 1929 could not have then come in. We are not impressed with the reasoning of the Patna High Court that because the change brought about by that Act is different from the change brought about by the a different conclusion follows. We should consider that if even the limited change in the area of succession effected by the Hindu Law of Inheritance (Amendment) Act, 1929 is to be given effect to as the law applicable on the date of the death of the limited owner, it is all the more reason why the which makes a much more radical change in the Hindu Law should have similar application. The Mysore High Court thought that the not being a mere declaratory Act, retrospective effect should not be given to it so as to impair existing rights and obligations. But the reversioners ' right being a mere spes succession is there is no question of impairing existing rights by adopting the interpretation we place on section 8 apart from the fact that, as earlier pointed out, the interpretation does not amount to giving retrospective effect to section 8. of course, if the property had already vested in a person under the ,old Hindu Law it cannot be divested. We must also point out that the classes of cases where such a question is likely to arise is very limited. Where a widow, mother or daughter was in possession of the estate on the coming into force of the she would become full owner under the provisions of the section 14 of the Act. Even if a widow was in possession of the share belonging to her in the joint family estate tinder the pro visions of the Hindu Women 's Right to property Act, 1937, she would become a full owner under section 14. In both those cases section 8 would have no operation. It is only in rare cases, like the present, that the question is likely to arise at all and we can see no reason either in principle or on authority why the principle consistently followed under the earlier Hindu Law that on the death of the limited owner succession opens and would be decided on the basis that the last male owner died on that day, should not apply even after coming into force of the Hindu ,Succession Act, Mr. Naunit Lal appearing for the appellant argued that the result ,of the decision of this Court in Eramma vs Verrupanna (supra) is that on the death of Wadhawa Singh 's widow it is the old Hindu Law that applied and therefore under the custom in force in Punjab under which a daughter was not entitled to succeed to the ancestral property of the father in preference to the reversioners should apply and the appellants are entitled to succeed. There is no doubt about the position under the Customary Law of Punjab before coming into force of the . In Rattigan 's Digest of the Customary Law ' published by the University Book Agency (14th Ed.), paragraph 23 at age 132 it is stated: " 23.(1) A daughter only succeeds to the ancestral landed property of her father, if an agriculturist, in default : (1) Of the heirs mentioned in the preceding paragraph and 535 (2) Of near male collaterals of her father, provided that a married daughter sometimes excludes near male collaterals, especially amongst Muhammadan tribes : (a) where she has married a near collateral descendant from the same common ancestor as her father; or (b) where she has, with her husband continuously lived with her father since her marriage; looking after his domestic wants, and assisting him in the management of his estate; or (c) where being married to a collateral of the father 's family, she has been appointed by her father as his heir. (2) But in regard to the acquired property of her father,the daughter is preferred to collaterals. " It is on the basis of this Customary Law that the reversioners succeeded in the suit filed by them questioning the gift made by the respondent 's mother to her. There is no doubt that Rattigan 's work is an authoritative one on the subject of Customary Law in Punjab, This Court in Mahant Salig Ram vs Musammat Maya Devi at 1196) said : "Customary rights of succession of daughters as against the collaterals of the father with reference to ancestral and non ancestral lands are stated in paragraph 23 (if Rattigan 's Digest of Customary Law. it is categorically stated in sub paragraph (2) of that paragraph that the daughter succeeds to the self acquired property of the father in preference to the collaterals even though they are within the fourth degree. Rattigan 's work has been accepted by the Privy Council as "a book of unquestioned authority in the Punjab". Indeed the correctness of this paragraph was not disputed before this Court in Gopal Singh vs Ujagar Singhi (1). It is not now open to the respondent to show whether any of the circumstances mentioned in sub paragraph (2) of paragraph 23 of Rattigan 's Digest of Customary Law is present here as the previous decision is resjudicata between the parties and in any case it has not been attempted to be shown in this case. But in the view we have taken that it is section 8 of the that applies and not the Customary Law the appellants cannot succeed in this appeal. In the result the appeal is dismissed. The appellants will pay the respondent 's costs. section B. W. Appeal dismissed.

The respondent 's father, W, who owned the suit property died in 1933. His widow, who succeeded to the estate, gifted the property to her daughter, the respondent. The appellants filed a suit as reversioners of W questioning the gift. The "it 'as decreed and the decree was confirmed on appeal. After coming into force of the on 17 6 1956, the widow again made a gift of the same, lands to the respondent. She died in 1963. The appellants then filed the suit, out of which this appeal arose, for possession of the lands. alleging that the second gift was void. The trial court decreed their suit but on appeal the respondent succeeded in the first Appellate Court as well as in the High Court on second appeal. On appeal by special leave to this Court, Dismissing the appeal, HELD (1) Following the decisions of the Privy Council in Moniram Kolita vs Keri Kolitani, I.L.R. 5 Calcutta 776 at 789 and Duni Chand vs Anar Kali, A.I.R. 1946 P.C. 173, (infra) the words "dying intestate in Sec. 8 of the Act must be interpreted as merely meaning "in the case of intestacy of a Hindu male" and to place this interpretation on the Act is not to give retrospective effect to its provisions. The reference is only to the fact of 'intestacy. The material point of time is the date when the succession opens, namely, the death of the widow. Thus this propositions follow (i) Succession opens on the death of the limited owner, and (ii) the law then in force would govern the succession. [532D G] Moniram Kolita vs Keri Kolitani, I.L.R. 5, Calcutta 776 789 and Duni Chand vs Anar Kali, A.I.R. 1946 P.C. 173, followed. Eramma vs Verritpatina, , explained and distinguished. Banso vs Charan Singh, A.I.R. 1961, Punjab 45 and Kuldip Sing vs Karnail Singh, A.I.R. 1961, Punjab, 573, approved. Kempiah vs Giriganima, A.I.R. , overruled. Renuka Bala vs Aswini Kumar A.I.R. 1961, Patna 498 and Sam pathkumari N. Lakshmi Ammal, A.I.R. 1963 Madras, 50, distinguished. (ii)Succession to W 's estate in the present cage opened when his widow died and it would have to be decided on the basis that W died in 1963 when his widow died. in that case succession to his estate would have to be decided on the basis of section 8 of the . The accepted position under the Hindu law is that where a limited owner succeeds to an estate the succession to the estate on her death will have to be decided on the basis that the last full owner died on that day. If, therefore, succession opens and is to be decided on the basis of the last full owner dying on the date of the death of the limited owner it is only the law in force at the time of the death of the limited owner that should govern the case. To hold that the old Hindu law applies to such a case is to allow your imagination to boggle. [533 A C, G H] Eastend Dwellings Co. Ltd. vs Finsbury Borough Council, , 132, per Lord Acsquit and Venka tachalam vs Bombay Dyeing & Mfg. Co. Ltd., ; , referred to. The reversioners ' right being a mere spes successions there is no question of impairing existing rights by adopting the interpretation we place on section 8 apart from 529 the fact that it does not amount to giving retrospective operation to section 8. Of course,, if the property had already vested in a person under the old Hindu Law, it cannot be divested. We can see no reason either in principle or on authority why the principle consistently followed under the earlier Hindu law that on the death of the limited owner succession opens and would be decided on the basis that the last male owner died on that day, should not apply even after coming into force of the Act. In the view we have taken it is section 8 of the Act that applies and not the Customary Law.[534C D,E F.535G]

Appeal No. 780 of 1962. Appeal by special leave from the judgment and decree dated November 28, 1960, of the Patna High Court, in Miscellaneous Judicial Case No. 724 of 1958. K. N. Rajagopal Sastri and R. N. Sachthey, for the appel lant. section K. Kapur and B. N. Kirpal, for the respondent. March 13, 1964. The judgment of HIDAYATULLAH and SHAH, JJ. was delivered by HIDAYATULLAH J. SARKAR J. delivered a dissenting opinion. SARKAR, J. This matter has come before us on a case stated by the Income tax Appellate Tribunal. The question is how to determine the cost of acquisition of bonus shares for ascertaining the profits made on a sale of them. The assessment year concerned is 1949 50 for which the accounting year is the calendar year 1948. The assessee held shares by way of investment and also as stock in trade of his business as a share dealer. We are concerned in this case only with its holdings of ordinary shares in Rohtas Industries Ltd. In 1944 the assessee acquired 31,909 of these shares at a cost of Rs. 5,84,283 / and was holding them in January 1945. In that month the Rohtas Industries Ltd. distributed bonus shares at the rate of one ordinary bonus share for each original share and so the assessee got 31,909 bonus shares. Between that time and December 31, 1947, the assessee sold 14,650 of the original shares with the result that on January 1, 1948 it held the following shares: (a) 17,259 original shares acquired in 1944, (b) 31,909 bonus shares issued in January 1945, (c) 59,079 newly issued shares acquired in the year 1945 after the issue of the bonus shares and (d) 2,500 further shares acquired in 1947. The total holding of the assessee on January 1, 1948 thus came to 1,10,747 shares which in its books had been valued at Rs. 15,57,902/ . In arriving at this figure the assessee had valued the bonus shares at the face value of Rs. 10/ each and the other shares at actual cost. On January 29, 1948, the assessee sold all these shares for the total sum of Rs. 15,50,458 / , that is, at Rs. 14/ per share and in its return for the year 1949 50 claimed a loss of Rs. 7,444 on the sale. It is this return which has led to this appeal. 213 The Income tax officer held that the assessee was not en titled to charge as the cost of acquisition of the bonus shares a sum equivalent to their face value for nothing had in fact been paid and he computed their cost at Rs. 6 8 0 per share. He arrived at this price by the following method, which has been called as the method averaging: 584283 x Face value of bonus shares: 319090 x 1/31909. In adopting this procedure the Income tax Officer purported to follow the decision of the Bombay High Court in Commissioner of Income tax vs Maneklal Chunilal and Sons Ltd.(1). The Bombay High Court later followed this case in Emerald and Co. Ltd. vs Commissioner of Income tax, Bombay City, Bombay (2). On that basis he held that the assessee had made a profit of Rs. 2,39,317 by way of capital gains and levied tax on it accordingly. On appeal the Appellate Assistant Commissioner held that these shares were not investment shares but formed the assessee 's stock in trade on which it was liable to pay income tax and not capital gains tax. He also held that the assessee having adopted the method of valuing the stocks at cost and no price having actually been paid for the bonus shares, it must be held that there was an inflation in the opening stock by Rs. 3,19,090. This figure, it may be observed, represented the cost of the bonus shares at their face value. It% his opinion the bonus shares had to be valued at nit. The appellate Commissioner 's conclusion was that the assessee was liable to be taxed on a trading profit of Rs. 3,11.646/ in respect of the sale of shares. Thise view was confirmed on a further appeal to the Appellate Tribunal. It is however not clear whether the Tribunal held that there had been a trading profit or capital gains. This matter does not seem to have been raised at any stage after the Appellate Commissioner 's order and is not material to the real question that has to be decided. After the Tribunal 's judgment the assessee got an order from the High Court directing the Tribunal to refer the following question to it: "Whether on the facts and circumstances of the case the profit computed at Rs. 3,11,646/ on the sale of shares in Rohtas Industries Ltd. was in accordance with law?" The answer to this question admittedly depends on the cost of acquisition, if any, to be properly attributed to the bonus shares. If the Appellate Commissioner 's method of valuing (1) (I.T. Ref. No. 16 of 1948, unreported). (2) 214 them at nil was wrong, the question had to be answered in the negative. The High Court, following the judgment of Lord Sumner in Swan Brewery Company Limited vs The King(1), held that the real cost of the bonus shares to the assessee was the face value of the shares and answered the question in the negative. The observations of Lord Sumner which he later expressed more fully in Commissioner of Inland Revenue vs Blott(2) , no doubt, lend support to the High Court 's view. I shall consider the view expressed by Lord Sumner later. Now, I wish to notice another case on which the High Court also relied and that was Osborne (H.M. Inspector of Taxes) vs Steel Barrel Co. Ltd(3). I do not think that the observations of Lord Greene M. R. in this case to which the High Court referred, are of any assistance. All that was there said was that when fully paid shares were properly issued for a consideration other than cash, the consideration must be at the least equal in value to the par value of the shares and must be based on an honest estimate by the directors of the value of the assets acquired. In that case fully paid shares had been issued in lieu of stocks and the question was as to how the stocks were to be valued. That case had nothing to do with the issue of bonus shares or the ascertainment of the cost of their acquisition. As I have said earlier, Lord Sumner 's observation in Blott 's case (2) certainly supports the view taken by the High Court but in that case Lord Sumner was in a minority. The other learned Judges, excepting Lord Dunedin, who took a somewhat different view to which reference is not necessary because it has not been relied upon, held that when the articles of a company authorise the issue of bonus shares and the transfer of a sufficient amount out of the accumulated profits in its hands representing their face value to the share capital account, what happens when the articles are acted upon is a capitalisation of the profits and the bonus shares issued are not in the hands of the share holder income liable to tax. In Blott 's case (2) the articles gave the power which had been acted upon. Lord Sumner on the other hand held that since a company could not issue shares for nothing nor pay for them out of its profits, it must be held that what happened in such a case was as if the company had issued cash dividend to the shareholder and had set it off against the liability of the shareholder to pay for the bonus share issued to him. I think the preferable view is that taken by the majority of the Judges. When the articles permit the issue of bonus shares and the transfer of undivided profits direct to the share capital account, it cannot be said that a cash dividend must be (1) (3) 215 deemed to have been declared which could be set off against the liability to pay for the shares. This is not what was done in fact. What in fact was done, and legally done, was to transfer the profits to the share capital account by a resolution passed by the majority of the shareholders so that the shareholders never acquired any right to any part of it. The view taken by the majority has since been followed unanimously, and even if it was open to doubt, for myself, at this distance of time, I would not be prepared to depart from it: Commissioners of Inland Revenue vs Fisher 's Executors(1) and Commissioner of Income tax, Bengal vs Mercantile Bank of India Limited(2). It is of some significance to observe that the latter is a case from India. In the present case the record does not contain any refer ence to the resolutions resulting in the issue of the bonus shares nor to the provisions of the articles but the case has proceeded before us on the basis that the bonus shares had been legally issued under powers contained in the articles and the profits had been equally legally transferred to the share capital account without the shareholders having acquired any right in them. Following the majority opinion in Blott 's case(3) I think I must hold that the High Court was in error in the view it took in the present case. There is no foundation for proceeding on the basis as if the bonus shares had been acquired by the assessee at their face value. Its profits cannot be computed on that basis. Two other methods of ascertaining the cost of acquisition of the bonus shares for computing the profits made on their sale have been suggested. One of them is the method of averaging which is the method adopted by the Bombay High Court in the cases earlier mentioned. The other is the method of finding out the fall in the price of the original shares on the issue of the bonus shares and attributing to the latter shares that fall and to value them thereby. The object of these methods seems to me to find out what the bonus shares actually cost the assessee. But this would be an impossible task for they actually cost the assessee nothing; it never paid anything for them. There would be more reason for saying that it paid the face value of the bonus shares because the profits of the Company of a, similar amount which might otherwise have come to it had been directly appropriated to the share capital account on the issue of the bonus shares. But this method I have rejected already and, for the reason that no amount was actually paid for the bonus shares by the assessee. For the same reasons the two suggested methods for ascertaining the actual (1) ; 2) (1936) A.C. 478. (3 ) 216 cost of these shares have also to be rejected. If however it were to be said that these methods were for finding out the market value of the bonus shares the importance of which value for the present purpose will soon be seen I would say that the only way to find out the market value is from the market itself. How then is the cost of the bonus shares to be determined? We start with this that nothing in fact was paid for them. But if the cost of acquisition is nil, the whole of the sale proceeds of the shares would be taxable profits. In Commis sioner of Income tax vs Bai Shirinbai K. Kooka(1) this Court has approved of the Bombay High Court 's view that "obvious ly, the whole of the sale proceeds or receipts could not be treated as profits and made liable to tax, for that would make no sense" (P. 397). So the profits cannot be ascertained on the basis that the bonus shares had been acquired for nothing. The view taken by the Appellate Commissioner and the Tribunal cannot be supported. It seems to me that the cost price of the bonus shares has to be decided according to the principle laid down in Bai Shirinbai Kooka 's case(1). The assessee in that case had purchased shares many years ago by way of investment at a comparatively lower price. She started trading with them from April 1, 1945. The question was how the profits on the sale of these shares were to be ascertained. The sale price was known but what was the cost price? The High Court said that in order to arrive at real profits one must consider the accounts of the business on commercial principles and construe profits in their normal and natural sense, a sense which no commercial man would misunderstand. The High Court 's conclusion was this: When the assessee purchased the shares at a lesser price, that is what they cost her and not the business; but so far as the business was concerned, the shares cost the business nothing more or less than their market value on April 1, 1945. This date, it will be remembered, was the date when the business was started. These observations were fully approved by this Court. Bai Shirinbai Kooka 's case(1) therefore is authority for the proposition that where it cannot be shown what was paid for the acquisition of a trading asset by a trader, it has for tax purposes to be deemed to have been acquired at the market value of the date when it was acquired. I think on the authority of this case, the bonus shares must in the present case be deemed to have been acquired at the market value of the date ,of their issue. I would, therefore, answer the question framed in the negative. (1) [1962] Supp. 3 S.C.R. 391. 217 HIDAYATULLAH, J. This appeal by the Commissioner of Income tax, Bombay raises the important question how bonus shares must be valued by an assessee who carries on business in shares. The assessee here is Dalmia Investment Co. Ltd. (now Shri Rishab Investment Co. Ltd.) which is a public limited company and the bonus shares were issued in the calendar year 1945 by Rohtas Industries Ltd. in the propor tion of one bonus share for one ordinary share already held by the shareholders. In this way, the assessee company received 31,909 bonus shares of the face value of Rs. 10/ per share which shows that its previous holding was 31,909 ordinary shares. The existing ordinary shares were purchased by the assessee company for Rs. 5,85,283/ . We now come to the assessment year 1949 50 which corresponded to the accounting period of the assessee company the calendar year 1948. The assessee company was holding shares as investment and was also dealing in shares. The shares in the trading account, being the stock in trade, were valued at the beginning of the year and also at the end of the year and the book value was based on cost. Between December 31, 1945 and January 1, 1948, the assessee company sold some shares of Rohtas Industries Ltd. and bought others. Its holding on the first day of January 1948 was 1,10,747 shares which were valued in its books at Rs. 15,57,902/ . The assessee company sold these shares on January 29, 1948 to Dalmia Cement and Paper Marketing Company Limited for Rs. 15,50,458/ . This date, it may be pointed cut, fell within the period in which capital gains were taxable. The assessee company returned a loss of Rs. 7,444/on this sale. In its books it had valued these shares as follows: Existing shares Book value (1) 17,259 (out of 31,909 original 13,10,951 Proportionate shares). cost from Rs. 5,84,283. (2) 31,909 Bonus shares 3,19,090. 00 at face value of Rs. 10 per share (3) 59,079 Now Issue shares 8,88,561 00at cost. (4) 2,500 New purchase shares 39,300 00at cost. Total 1,10,747 shares 15,57,902. 00 The amount of Rs. 3,19,090/ which represented the cost of the bonus shares in the above account was debited to the investment account and an identical amount was credited to a capital reserve account. , The loss which was returned was the difference between Rs. 15,57,902/ claimed to be the cost price of 1, 10,747 shares and their sale price of Rs. 15,50,458/. The return was not accepted by the Income tax Officer, Special Investigation Circle, Patna. In his assessment order, the Income tax Officer held that the market value of the existing 218 shares when bonus shares were issued, was Rs. 18/ per share and the value of the shares was Rs. 5.74,362/ (31,909 x Rs. 18). He held that the sale of the shares took place at Rs. 14/ per share. To this data he purported to apply a deci sion of the High Court of Bombay in Commissioner of Income tax vs Maneklal Chunnilal and Sons(1) and held that there was profit of Rs. 7/8/0 per bonus share and the, total profit was Rs. 2,39,317/ which he held was capital gain. He brought Rs. 2,39,317/ to tax as capital gains. Before the Appellate Assistant Commissioner, Patna. reliance was placed upon the decision of the Bombay High Court in Emerald and Co. Ltd. vs Commissioner of Incometax, Bombay City(2) and it was argued that by applying the principle laid down in that case, the average cost was Rs. 9/10/0 per share and total profit Rs. 1,49,355/ . The Appellate Assistant Commissioner did not accept the above calculation. According to the Appellate Assistant Commissioner, the bonus shares had cost nothing to the assessee company. He omitted Rs. 3,19,090/ from the book valuation and held that the actual cost of 1,10,747 shares was Rs. 12,38,812/and that the assessee company instead of suffering a loss of Rs. 7,444/ on the sale of the shares had actually made profit of Rs. 3,11,646/ . He issued a notice to the assessee company and enhanced the assessment. On further appeal to the Tribunal, the assessee company submitted again on the strength of the ruling of the Bombay High Court in Emerald and Co. Ltd. vs Commissioner of Income tax, Bombay City(2) that the actual profit was Rs. 1,57,326/ . This was done by spreading the cost of the 31,909 ordinary shares over those shares and bonus shares taken together and adding to half the cost attributable to the old ordinary shares the cost of new purchases in the same year and finding out the average cost of shares other than bonus shares. The Tribunal did not accept this calculation. According to the Tribunal it was not possible to put a valuation upon shares for which nothing was paid. The Tribunal held that the old shares and bonus shares could not be "clubbed together" and the decision of the Appellate Assistant Commissioner was right. The Tribunal, however, stated a case under section 66(1) of the Income tax Act at the instance of the assessee company suggesting the question for the opinion of the High Court: "Whether on the facts and circumstances of the case, the profit computed at Rs. 3,11,646/ on the sale of shares in Rohtas Industries Ltd. was in accordance with law?" (1) Income tax Reference No. 16 of 1948 dt. 23 3 1949. (2) 219 The reference was heard by V. Ramaswamy, C.J. and Kanhaiya Singh, J. They held that the Income tax authorities were wrong in holding that profit should be computed at Rs. 3,11,646/ or at any other amount. According to them, there was no profit on the sale of 31,909 shares and they answered the question in favour of the assessee. Before the High Court it was contended by the assessee company that the bonus shares must be valued at their face value of Rs. 10/ per share and the Department contended that they should be valued at nil. It appears that the other methods of calculation of the cost price of bonus shares were abandoned at that stage. Ramaswami, C.J. and Kanhaiya Singh, J. held that the issue of bonus shares was nothing but a capitalisation of the company 's reserve account or the profits and the bonus shares could not be considered to be issued free. According to them, the payment for the shares must be found in the bonus which was declared from the undistributed profits and the face value of the bonus shares represented the detriment to the assessee company in respect of the undistributed reserves. The present appeal was brought against the decision of the High Court by special leave granted by this Court. It will be seen from the above that there are four possible methods for determining the cost of bonus shares. The first method is to take the cost as the equivalent of the face value of the bonus shares. This method was followed by the assessee company in making entries in its books. The second method adopted by the Department is that as the shareholder pays nothing in cash for the shares, cost should be taken at nil. The third method is to take the cast of the original shares and to spread it over the original shares and bonus shares taken collectively. The fourth method is to find out the fall in the price of the original shares on the stock exchange and to attribute this to the bonus shares. Before us the assessee company presented for our acceptance the first method and the Department the third method. We shall now consider which is the proper way to value the bonus shares. It is convenient to begin with the contention that the cost of bonus shares must be taken to be their face value. The argument requires close attention, because support for it is sought in certain pronouncements of Lord Sumner to which reference will be made presently. Mr. Kapur contends that a company cannot ordinarily issue shares at a discount, and argues that a fortiori it cannot issue shares for nothing. He submits therefore that the issue of bonus shares involves a twofold operation the creation of new shares and the declaration of a dividend or bonus which dividend or bonus must be deemed to be paid to the shareholder and to be returned by him to acquire the new shares. Since the amount credited in 220 the books of the company as contribution of capital by the shareholder is the face value of the bonus shares, he contends that the cost to the shareholder is equal to the face value of the bonus shares. He relies upon the decision of the Privy Council in Swan Brewery Company Ltd. vs Rex(1). In that case, Lord Sumner observed: "True, that in a sense it was all one transaction, but that is an ambiguous expression. In business, as in contemplation of law, there were two transactions, the creation and issue of new shares on the company 's part, and on the allottees ' part the satisfaction of the liability to pay for them by acquiescing in such a transfer from reserve to share capital as put an end to any participation in the sum of pound 101,450 in right of the old shares, and created instead a right of general participation in the company 's profits and assets in right on the new shares, without any further liability to make a cash contribution in respect of them." Lord Sumner adhered to his view later in the House of Lords in Commissioner of Inland Revenue vs John Blott(2) but Lord Dunedin and he were in a minority, and this view was not accepted by the majority. In view of this conflict, it is necessary to state what really happens when a company issues bonus shares. A limited liability company must state in its memorandum of association the amount of capital with which the company desires to do business and the number of shares into which that capital is to be divided. The company need not issue all its capital at the same time. It may issue only a part of its capital initially and issue more of the unissued capital on a later date. After the company does business and profits result, it may distribute the profits or keep them in reserve. When it does the latter, it does not keep the money in its coffers , the money is used in the business and really represents an increase in the capital employed. When the reserves increase to a considerable extent, the issued capital of the company ceases to bear a true relation to the capital employed. The company may then decide to increase its issued capital and declare a bonus and issue to the shareholders in lieu of bonus, certificates entitling them to an additional share in the increased capital. As a matter of accounting the original shares in a winding up before the increase of issued capital would have yielded to the shareholder the same return as the old shares and the new shares taken together. What was previously owned by the shareholder by virtue of the original certificates is after the issue of bonus (1) (2) 8 Tax Cases 101. 221 shares, held by them on the basis of more certificates. In point of fact, however, what the shareholder gets is not cash but property from which income in the shape of money may be derived in future. In this sense, there is no payment to him but an increase of issued capital and the right of the shareholder to it is evidenced not by the original number of certificates held by him but by more certificates. There is thus no payment of dividend. A dividend in the strict sense means a share in the profits and a share in the profits can only be said to be paid to the shareholder when a part of the profits is released to him in cash and the company pays that amount and the shareholder takes it away. The conversion of the reserves into capital does not involve the release of the profits to the shareholder , the money remains where it was, that is to say, employed in the business. Thereafter the company employs that money not as reserves of profits, but as its proper capital issued to and contributed by the shareholders. If the shareholder were to sell his bonus shares, as shareholders often do, the shareholder parts with the right to participation in the capital of the company, and the cash he receives is not dividend but the price of that right. The bonus share when sold may fetch more or may fetch less than the face value and this shows that the certificate is not a voucher to receive the amount mentioned on its face. To regard the certificate as cash or as representing cash paid by the shareholder is to overlook the internal process by which that certificate comes into being. We may now see what was decided in the Swan Brewery 's(1) case. In that case the company had not distributed all its profits in the past. As a result, it had a vast reserve fund. The company increased its capital and from the reserve fund, issued shares pro rata. These shares, it was held by Lord Sumner, were dividend. It was claimed in that case that there was no dividend and no distribution of dividend, because nothing had been distributed and nothing given. Where formerly there was one share, after the declaration of bonus there were two but the right of participation was the same. This argument was not accepted and the face value of the shares was taken to be dividend. Section 2 of the Act of Western Australia, however, defined dividend to include "every profit, advantage or gain intended to be paid or credited to or distributed among the members of any company. " It is obvious that it was im possible to hold that the bonus shares were outside the extended definition. Swan Brewery 's(1) case has been accepted as rightly decided on the special terms of the section, as indeed it was. In Blott 's(2) case, Rowlatt, J. observed that the bonus shares were included in the expression "advantage" occurring in the (1) (2) 8 Tax Cases 101. 222 highly artificial definition of the word "dividend". In the Court of Appeal, Lord Sterndale, M. R. and Warrington and ' Scrutton, L. JJ. distinguished the case on the same ground. It was, however, pointed out by the Master of Rolls that in Bouch vs Sproule(1) Lord Herschell had observed that in such a case, the company does not pay or intend to pay any sum as dividend but intends to and does appropriate the undivided profits and deals with them as an increase of the capital stock in the concern. Blott 'S(2) case then reached the House of Lords. It may be pointed out at this stage that it involved a question whether super tax was payable on the amount represented by the face value of the bonus share. For purposes of assessment of supertax which was (as it is in our country) a tax charged in respect of income of an individual the total of all income from all sources had to be taken into account and the tax was exigible if the total increased a certain sum. Such additional duty is really nothing but additional income tax and is conveniently described as super tax. Viscounts Haldane, Finlay and Cave held that an amount equal to the face value of the shares could not be regarded as received by the tax payer and that there was no more than the capitalisation of the profits of the company in respect of which certificates were issued to the shareholders entitling them to participate in the amount of the reserve but only as part of the capital. Lords Dunedin and Sumner, however, held that the word "capitalisation" was somewhat "hazy" and the issue of the shares involved a dual operation by which an amount was released to the shareholder but was retained by the company and applied in payment of those shares. In our opinion, and we say it respectfully, the better view is that of the majority and our conclusions set out earlier accord substantially with it. It follows that though profits are profits in the hands of the company but when they are disposed of by converting them into capital instead of paying them over to the share holders, no income can be said to accrue to the shareholder because the new shares confer a title to a larger proportion of the surplus assets at a general distribution. The floating capital used in the company which formerly consisted of subscribed capital and the reserves now becomes the subscribed capital. The amount said to be payable to the shareholders as income goes merely to increase the capital of the company and in the hands of the shareholders the certificates are property from which income will be derived. Lord Dunedin did not rely upon Swan Brewery 's(3) case. He held that as the company could not pay for another, the shareholder must be taken to have paid for the bonus shares himself and the payment was (2 ) 8 Tax Cases 101. (3) 223 the amount which came from the accumulated profits as pro fits. Lord Sumner, however, stated that in Swan Brewery 's(1) case, he did not rely upon the extended definition of dividend in the Australian Statute, but upon the principle involved. He observed that as a matter of machinery, what was done was to keep back the money released to the shareholder for application towards payment for the increased capital. Lord Sumner had already adhered to his view in an earlier case of the Privy Council, but Swan Brewery 's(1) case and Blott 's(2) case were considered by the Privy Council in Com missioner of Income tax, Bengal vs Mercantile Bank of India Ltd. and others(3). Lord Thankerton distinguished Swan Bre wery 's(1) case and followed Blott 's(2) case, though in Nicholas vs Commissioner of Taxes of the State of Victoria(4), Blott 's (2) ,case was distinguished on the ground that the definition in the Unemployment Relief Tax (Assessment) Act, 1933 also included within a person 's assessable income "any dividend, interest, profit or bonus credited, paid or distributed to him by the company from any profit derived in or from Victoria or elsewhere by it", and that bonus shares must be regarded as dividend under that definition. The Indian Income tax Act defines "dividend" and also extends it in some directions but not so as to make the issue of bonus shares a release of reserves as profits so that they could be included in the term. The face value of the shares cannot therefore be taken to be dividend by reason of anything in the definition. The share certificate which is issued as bonus entitles the holder to a share in the assets of the company and to participate in future profits. As pointed out above, if sold, it may fetch either more or less. The market price is affected by many imponderables, one such being the yield or the expected yield. The detriment to the shareholder, if any, must therefore be calculated on some principle, but the method of computing the cost of bonus shares at their face value does not accord either with fact or business accountancy. Can we then say that the bonus shares are a gift and are acquired for nothing? At first sight, it looks as if they are so but the impact of the issue of bonus shares has to be seen to realise that there is an immediate detriment to the shareholder 'in respect of his original holding. The Income tax Officer, in this case, has shown that in 1945 when the price of shares became stable it was Rs. 9 per share, while the value of the shares before the issue of bonus shares was Rs. 18/ per share. In other words, by the issue of bonus shares pro rata, which Tanked pari passu with the existing shares, the market price was exactly halved, and divided between the old and the bonus shares. This will ordinarily be the case but not when the shares (1)(1914) A.C. 231. (3)(1936) A.C. 478. (2) 8 Tax Cases 101. (4) 224 do not rank pari passu and we shall deal with that case separately. When the shares rank pari passu the result may be stated by saying that what the shareholder held as a whole rupee coin is held by him, after the issue of bonus shares, in two 50 nP coins. The total value remains the same, but the evidence of that value is not in one certificate but in two. This was expressed forcefully by the Supreme Court of United States of America, quoting from an earlier case, in Eisner vs Macomber(1) thus: "A stock dividend really takes nothing from the property of the corporation, and adds nothing to the interests of the shareholders. Its property is not diminished, and their interests are not increased. The proportional interest of each shareholder remains the same. The only change is in the evidence which represents that interest, the new shares and the original shares together representing the same proportional interest that the original shares represented before the issue of the new ones In short, the corporation is no poorer and the stock holder is no richer than they were before If the plaintiff gained any small advantage by the change, it certainly was not an advantage of $417,450 the sum upon which he was taxed What has happened is that the plaintiff 's old certificates have been split up in effect and have diminished in value to the extent of the value of the new. necessarily disposes of a part of his capital interest, just as if he should sell a part of his old stock, either before or after the dividend. What he retains no longer entitles him to the same proportion of future dividends as before the sale. His part in the control of the company likewise is diminished. " Swan Brewery 's (2) case, it may be pointed out, was distinguished here also on the basis of the extended definition. it follows that the bonus shares cannot be said to have cost nothing to the shareholder because on the issue of the bonus shares, there is an instant loss to him in the value of his original holding. The earning capacity of the capital employed remains the same, even after the reserve is converted into bonus shares. By the issue of the bonus shares there is a corresponding fall in the dividends actual or expected and the market price moves accordingly. The method of calculation which places the value of bonus shares at nil cannot be correct. (1) L.Ed. 521. (2)(1914) A.C. 231. 225 This leaves for consideration the other two methods. Here we may point out that the new shares may rank pari passu with old shares or may be different. The method of cost .accounting may have to be different in each case but in essence and principle there is no difference. One possible method is to ascertain the exact fall in the market price of the shares already held and attribute that fall to the price of the bonus shares. This market price must be the middle price and not as represented by any unusual fluctuation. The other method is to take the amount spent by the shareholder in acquiring his original shares and to spread it over the old and new shares treating the new as accretions to the old and to treat the cost price of the original shares as the cost price of the old shares and bonus shares taken together. This method is suggested by the Department in this case. Since the bonus shares in this case rank pari passu with the old shares there is no difficulty in spreading the original cost over the old and the new shares and the contention of the Department in this case is right. But this is not the end of the present discussion. This simple method may present difficulties when the shares do not rank pari passu or are of a different kind. In such cases, it may be necessary to compare the resultant price of the two kinds of shares in the market to arrive at a proper cost valuation. In other words, if the shares do not rank pari passu, assistance may have to be taken of other evidence to fix the cost price of the bonus shares. It may then be necessary to examine the result as reflected in the market to determine the equitable cost. In England paragraph 10 of Schedule Tax to the Finance Act, 1962 provides for such matters and for valuing Rights issue but we are not concerned with these matters and need not express an opinion. It remains to refer to three cases to which we have already referred in passing and on which some reliance was placed. In The Commissioner of Income tax (Central), Bombay vs M/s Maneklal Chunnilal and Sons Ltd., Bombay(1), the assessee held certain ordinary shares of the face value of Rs. 100/ in Ambica Mills Ltd. and Arvind Mills Ltd. These two com panies then declared a bonus and issued preference shares in the proportion of two to one of the face value of Rs. 100/ each. These preference shares were sold by the assessee and if the face value was taken as the cost, there was a small profit. The Department contended that the entire sale proceeds were liable to be taxed, because the assessee had paid nothing for the bonus shares and everything received by it was profit. The assessee 's view was that the cost was equal to the face value of the shares. The High Court rejected both these contentions and held that the cost of the shares previously held must be divided between those shares and the bonus shares in the same (1)I.T. Ref. No. 16 of 1948 d. 23rd March 1949. 226 proportion as their face value, and the profit or loss should then be found out by comparing the cost price calculated on this basis with the sale price. In our opinion, there is difficulty in the High Court 's decision. The preference shares and the ordinary shares could hardly be valued in the proportion of their face value. The ordinary shares and the preference shares do not rank pari passu. The next case is Emerald Co. Ltd. vs C.I.T., Bombay City(1). In that case, the assessee had, at the beginning of the year, 350 shares of which 50 shares were bonus shares and all were of the face value of Rs. 250/ each. The assessee sold 300 shares and claimed a loss of Rs. 35,801 / by valuing the bonus shares at face value. The Department arrived at a loss of Rs. 27,766/ by the method of averaging the cost, following the earlier case of the Bombay High Court just referred to. The Tribunal suggested a third method. It ignored the 50 shares and the loss was calculated by considering the cost of 300 shares and their sale price. The loss worked out at Rs. 27,748/ , but the Tribunal did not disturb the order of the Appellate Assistant Commissioner in view of the small difference. The High Court held that the method adopted by the Department was proper but this Court, on appeal, held that in that case the method adopted by the Tribunal was correct. This Court did not decide which of the four methods was the proper one to apply, leaving that question open. The reason was that the assessee originally held 50 shares in 1950; in 1951, it received 50 bonus shares. It sold its original holding three days later and then purchased another 100 shares after two months. In the financial year 1950 51 (assessment year 1951 52), the Income tax Officer averaged the price of 150 shares and found a profit of Rs. 1,060/ on the sale of 50 shares instead of a loss of Rs. 1,365/ which was claimed. The assessee did not appeal. In the financial year 1951 52 (assessment year 1952 53), the assessee started with 150 shares (100 purchased and 50 bonus). It then purchased 200 shares in two lots and sold 300 shares, leaving 50 shares. The assessee company claimed a loss of Rs. 35,801 / . The Income tax Officer computed the loss at Rs. 27,766/ and the Tribunal computed the loss at Rs. 27,748 The Tribunal, however, did not disturb the loss as computed by the Income tax Officer in view of the slender difference of Rs. 18/ . The High Court 's decision was reversed by this Court, because the High Court ignored all intermediate transactions and averaged the 300 shares with the 50 bonus shares. The shares in respect of which the bonus shares were issued were already averaged with the bonus shares. This was not a case of bonus shares issued in the year of account. It involved purchase and sale of some of the shares. The average cost price of the original and bonus shares was (1)(1956) 227 already fixed in an earlier year by the Department and this fact should have been taken into account. No doubt, Chagla, C.J. observed that it was not known which of the several :shares were sold in the year of account, but in the Statement of the Case it was clearly stated that bonus shares were untouched. The decision of this Court in Emerald Company 's(1) case. however, lends support to the view which we have expressed here. The bonus shares can be valued by spreading the cost of the old shares over the old shares and the new issue taken together, if the shares rank pari passu. When they do not, the price may have to be adjusted either in the proportion of the face value they bear (if there is no other circumstance differentiating them) or on equitable considerations based on the ,market price before and after the issue. Applying the principles to the present case, the cost of 31,909 shares, namely, Rs. 5,84,283/ must be spread over those shares and the 31,909 bonus shares taken together. The ,cost price of the bonus shares therefore was Rs. 2,92,141 /because the bonus shares were to rank equal to the original ,shares. The account would thus stand as follows: Share in Rohtas Industries Ltd. Rs. 1 . Old issue of 17,259 shares brought forward from 1945, at (proportionate) cost 1,58, 035 2. Bonus shares 31,909 received in 1945, at (proportionate, spread out) cost 2,92,141 3. New issue 59,079 shares brought forward from 1945 8,88,561 4. New purchases 2,500 shares brought forward from 1947 39,300 Total 1,10,747 shares 13,78,037 Sales of all theabove shares in 1948 15,50,458 Profit 7,444 Profit to be added to the income returned 1,79,865 The answer to the question given by the High Court was therefore erroneous and the right answer would be that the profit computed at Rs. 3,11,646/ was not in accordance with law. The appeal is therefore allowed with costs here and in the High Court. Appeal allowed.

The assessee company dealt in shares and also held invest ments of shares on January 1, 1948. The assessee held 1,10,747, shares of Rohtas Industries at a book value of Rs. 15,57,902/ . Of these shares 31,909 were bonus shares issued by Rohtas Industries in 1945 at the face value of Rs. lo/, each and the assessee had debited the investment account in respect of the bonus shares by Rs. 3,19,090 with a corresponding entry in the capital reserve account on its credit side for the same amount. The assessee acquired these bonus shares at a cost of Rs. 5,84,283 in 1944. On January 29, 1948, the assessee sold the entire lot of 1,10,747 shares for Rs. 15,50,458. The assessee deducted the sale price from the book value of Rs. 15,57,902 and claimed a loss of Rs. 7,444 on the sale of shares. The appellate Tribunal valued the bonus shares at nil and held that the assessee had made a profit of Rs. 3,11,646/ . On a reference the High Court held that the Tribunal was wrong in holding that the assessee had made a profit of Rs. 3,11,646/ . Held (per Hidayatullah and Shah, JJ.): (i) The Income tax Act defines "dividend" and also extends it in some directions but not so as to make the issue of bonus shares a release of reserves as profits so that they could be included in the term. The face value of the shares cannot therefore be taken to be dividend by reason of anything in the definition. The shares certificate which is issued as bonus entitles the holder to a share in the assets of the company and to participate in future profits. The bonus share when sold may fetch more or may fetch less than the face value, and this shows that the certificate is not a voucher to receive the amount mentioned on its face. The market price is affected by many imponderables, one such being the yield or the expected yield. The detriment to the share holder, if any, must therefore be calculated on some principle, but the method of computing the cost of bonus shares at their face value does not accord either with fact or business accountancy. Swan Brewery Co. Ltd. vs Rex , disapproved. Commissioner of Inland Revenue vs John Blott, 8 Tax Cases 101, approved. Bouch V. Sproule, , referred to. Commissioner of Income tax, Bengal vs Mercantile Bank of India Ltd., and Nicholas vs Commissioner of Taxes of the State of Victoria, , referred to. (ii) The bonus shares cannot be said to have cost nothing to the share holder because on the issue of its bonus shares, there is an instant loss to him in the value of his original holding. The earning capacity of the capital employed remains the same, even after the reserve is converted into bonus shares. By the issue of the bonus shares there is a corresponding fall in the dividends 211 actual or expected and the market price moves accordingly. The method of calculation which places the value of bonus shares, at nil cannot be correct. (iii) The bonus shares can be valued by spreading the cost of the old shares over the old shares, and the new issue taken together, if the shares rank pari passu. When they do not, the price may have to be adjusted either in the proportion of the face value they bear (if there is no other circumstances differentiating them) or on equitable considerations based on the market price before and after the issue taking the middle price not that represented by any unusual fluctuations. On the facts of this case it was held that since the bonus shares in this case rank pari passu with the old shares there is no difficulty in spreading the original cost over the old and the new shares. Commissioner of Income tax vs Maneklal Chunilal and Sons, Income tax Reference No. 16/1948, dt. 23 3 1949, disapproved. Emerald and Co. Ltd. vs Commissioner of Income tax, Bombay City, , distinguished. Eisner vs Macomber, L.Ed. 521, referred to. Per Sarkar, J. (dissenting): (i) The view taken by the majo rity of Judges in Blott 's case is a correct one. In that case the learned Judges held that when the articles of a company authorise the issue of bonus shares and the transfer of a sufficient amount out of the accumulated profits in its hands representing their face value to the share capital account, what happens when the articles are acted upon is a capitalisation of the profits and the bonus shares issued are not in the hands of the share holder income liable to tax. Following the majority opinion in Blott 's case it was held that the High Court was in error in the view it took in the present case. There is no foundation for proceeding on the basis as if the bonus shares had been acquired by the assessee at their face value. Its profits cannot be computed on that basis. Commissioner of Inland Revenue vs Blott (1921)2 A.C. 171, relied on. Swan Brewery Co. Ltd. vs King , disapproved. Osborne (H.M. Inspector of Taxes) vs Steel Barrel Co. Ltd., , inapplicable. Commissioner of Inland Revenue vs Fisher 's Executors, ; and Commissioner of Income tax, Bengal vs Mer cantile Bank of India Ltd., , referred to. Commissioner of Income tax vs Maneklal Chunilal and Sons Ltd., I.T. Ref. No. 16 of 1948 and Emerald and Co. Ltd. vs Commissioner of 1ncome tax, Bombay City, , referred to. (ii) Bai Shirinbai Kooka 's case is the authority for the proposition that where it cannot be shown what was paid for the acquisition of a trading asset by a trader, it has for tax purposes to be deemed to have been acquired at the market value of the date when it was acquired. On the basis of this authority the Bonus shares must in the present case be deemed to have been acquired at the market value of the date of their issue. (iii) On the basis of the same authority, it would not be correct to say that the bonus shares had been acquired for nothing. 212 The view taken by the Appellate Commissioner and the Tribunal cannot be supported. Commissioner of Income tax vs Bai Shirinbai K. Kooka, [1962] Supp. 3 S.C.R. 391, relied on.

No. 110 of 1964. Petition under article 32 of the Constitution of India for the enforcement of fundamental rights. B. Sen and B. N. Kirpal, for the petitioner. 422 C. K. Daphtary, Solicitor General and B. R. G. K. Achar, for the respondent Nos. 1 and 2. The Judgment of the Court was delivered by Wanchoo, J. This petition under article 32 of the Constitution is a sequel to the judgment of this Court in T. Devadasan vs Union of India(1). The petitioner was Assistant in Grade IV of the Central Secretariat Service. The next post which the petitioner could expect to get was of Section Officer (Assistant Superintendent). Recruitment to the post of Section Officer is made in the following manner : (i)50% by direct recruitment from those who obtain lower ranks in the Indian Administrative Service etc. examinations. (ii)25 % by promotion from Grade IV on the basis of a departmental examination held at intervals by the Union Public Service Commission, and (iii) 25 % by promotion from Grade IV on the basis of seniority cum fitness. In February 1960 the Union Public Service Commission issued a notification to the effect that a limited competitive examination for promotion to the post of Section Officers would be held in June 1960. The notification further stated that reservation of 121% of the available vacancies would be made for members of scheduled castes and 5% for the members of scheduled tribes. The number of vacancies to be filled was to be announced later. The petitioner sat for this examination and he is said to have secured the 37th position in order of merit. Later, a press communique was issued by the Union Public Service Commission in the which it was stated that the number of vacancies expected to be filled was 48 out of which 32 were reserved for schedule castes and scheduled tribes and 16 were unreserved. Eventually however the Union Public Service Commission recommended 45 names for appointment, 16 of which were unreserved and 29 were reserved against vacancies for scheduled castes and scheduled tribes. Finally, however, the Government made only 43 appointments, 15 in the unreserved quota and 28 in the reserved quota. This heavy reservation for scheduled castes and scheduled tribes was made on the basis of the "carry forward" rule which was put into force from 1955. According to the resolution of the Ministry of Home Affairs dated September 13, 1950 reservation for scheduled castes and (1) ; 423 scheduled tribes was fixed at 121% and 5% respectively without anything like the 'carry forward" rule. In 1952 however supplementary instructions were issued in this connection in the following terms : "5(3). If a sufficient number of candidates of the communities for whom the reservations are made, who are eligible for appointment to the post in question and are considered by the recruiting authorities as suitable in all respects for appointment to the reserved quota of vacancies, are not available the vacancies that remain unfilled will be treated as unre served and filled by the best available candidates; but a corresponding number of vacancies will be reserved in the following year for the communities whose vacancies are thus filled up in addition to such number as would originally be reserved for them under the,orders contained in the. Resolution. "5(4). If suitably qualified candidates of the communities for whom the reservations have been made are again not available to fill the vacancies carried forward from the previous year under clause (3) above, the vacancies not filled by them will be treated as unreserved and the reservations made in those vacancies will lapse. As a result of these instructions reserved vacancies for scheduled castes and scheduled tribes which could not be filled in one examination would be carried forward to the next examination. But if sufficient number of scheduled caste and scheduled tribe candidates were not available to fill the vacancies carried forward plus vacancies of the next year the vacancies were to be treatd as unreserved and the reservation made in those vacancies would lapse. Thus according to 1952 instructions the carry forward was only for two years and thereafter there was no carry forward in 1955 however. Government made further change in the carry forward rule and paras. 5 (3 ) and 5 (4) of the instructions of 1952 were substituted thus '5 (3 ) (a). If a sufficient number of candidates, considered suitable, by the recruiting authorities, are not available from the communities for whom reservations are made, in a particular year, the unfilled vacancies should be Mated as unreserved and filled by the best available candidates. The number of reserved vacancies thus treated as unreserved will be added as an additional quota to the number that would be reserved in the L3 Sup./65 11 424 following year in the normal course; and to the extent to which approved candidates are not available in that year against this additional quota, a corresponding addition should be made to the number of reserved vacancies in the second following year. "Thus the number of reserved vacancies of 1954 which were treated as unreserved for want of suitable candidates in that year will be added to the normal number of reserved vacancies in 1955. Any recruitment against these vacancies in 1955 will first be counted against the additional quota carried forward from 1954. If however suitable candidates are not available in 1955 also and a certain number of vacancies are treated accordingly as 'unreserved ' in that year, the total number of vacancies to be reserved in 1956 will be un utilised balance of the quota carried forward from 1954 and 1955 plus the normal percentage of vacancies to be reserved in 1956. The un utilised quota will not, however, be carried forward in this manner for more than two years. "An annual report of reserved vacancies which were treated as unreserved for want of suitable candidates from scheduled castes or scheduled tribes as the case may be should be forwarded to the Ministry of Home Affairs in the form enclosed as Annexure I along with the annual communal returns already prescribed. In addition Ministries themselves will take adequate steps to ensure that any lapse on the part of subordinate authorities in observing the reservation rules cannot go unnoticed by a reviewing authority within the Ministry itself at a sufficiently early date. " (b) In the event of a suitable scheduled caste candidate not being available, a scheduled tribe candidate can be appointed to the reserved vacancy and vice versa subject to adjustment in the subsequent point.% of the roster. " The result of this change was to carry forward the unfilled vacancies for two years and thus in the third year the vacancies to be filled by scheduled caste and scheduled tribe candidates would be the un utilised balance from the previous two years plus the normal percentage of the vacancies reserved in the third year. Unlike the rule of 1952, this rule did not provide for any lapse 425 but said that the un utilised quota will not however be carried forward in this manner for more than two years. The result of the substitution of the 1955 rule was that paras. 5(3) and 5(4) of the 1952 rule ceased to exist and it was in pursuance of the 1955 rule that the Union Public Service Commission announced as already indicated that out of 48 expected vacancies, 16 would be unreserved and 32 would be reserved for scheduled caste and scheduled tribe candidate& Ibis reservation was attacked in the, case of Devadasan(1) and this Court struck down the carry forward rule of 1955 (in place of paras 5(3) and 5(4) of the 1952rule) on the ground that the carry forward rule as modified in 1955 was unconstitutional. No other relief besides the declaration that the 1955 carry forward rule was unconstitutional was granted in Devadasan 's case(1). It was however hoped that the department concerned would implement the decision of this Court in an appropriate manner. The petitioner contends that the effect of this Court 's judgment in Devadasan 's case(1) is that there is no carry forward rule in existence as the 1955 carry forward rule was struck down by this Court and the 1952 rule had ceased to exist by the substitution made by the Government of India in 1955. The petitioner further contends that in view of there being no carry forward rule either of 1952 or of 1955 after the judgment of this Court in Devadasan 's case(1) all that the Government of India could do in the matter of reservation for the examination conducted in 1960 was to reserve 12 1/2% of the vacancies for scheduled castes and for scheduled tribes. In the alternative it is submitted that if the carry forward rule of 1952 is still deemed to exist that rule is also bad being violative of article 16 of the Constitution. The petitioner finally contends that the carry forward rules of 1952 and 1955 being out of this way and the only reservation that was possible in the examination of 1960 being 12 1/2% for scheduled castes and 5 % for scheduled tribes, he was entitled to be appointed ' on that basis. He therefore prays that a direction should be issued setting aside appointments of certain candidates belonging to scheduled castes and scheduled tribes over and above the reserved quota of 171 % and the Union Public Service Commission should be directed to announce the result of the said examination afresh after receiving 12 1/2 % of the vacancies for scheduled castes and 5% for scheduled tribes. The application is opposed on behalf of the Union of India and the main contention urged is that even if the carry forward rule (1) ; 426 of 1952 is deemed to be non existent because it was substituted by the carry forward rule of 1955, the petitioner would not be entitled to be appointed in any case in view of the position he had secured in the examination. The first question therefore that arises is whether the carry forward rule of 1952 can still be said to exist. The next question is whether the carry forward rule of 1952, if it still exists is bad for the same reasons as the carry forward rule of 1955, as held by this Court in Devadasan 's case(1). The last question is whether the petitioner would be entitled to appointment even if the carry forward rule of 1952 does not exist. We shall first consider the question whether the carry forward rule of 1952 still exists. It is true that in Devadasan 's case(1), the final order of this Court wag in these terms : "In the result the petition succeeds partially and the carry forward rule as modified in 1955 is declared invalid. " That however does not mean that this Court held that the 1952rule must be deemed to exist because this Court said that the carry forward rule as modified in 1955 was declared invalid. The carry forward rule of 1952 was substituted by the carry forward rule of 1955. On this substitution the carry forward rule of 1952 clearly ,Ceased 'to exist because its place was taken by the carry forward rule of 1955. Thus by promulgating the new carry forward rule in 1915, the government of India itself cancelled the carry forward rule,of 1952. When therefore this Court struck down the carry forward rule as modified in 1955 that did not mean that the carry forward rule of 1952 which had already ceased to exist, because the Government of India itself cancelled it and had substituted a modified rule in 1955 in its place, could revive. We are therefore of opinion that after the judgment of this Court in Devadasan 's case(1) there is no carry forward rule at all, for the carry forward rule of 1955 was struck down by this Court while the carry forward rule of 1952 had ceased to exist when the Government of India substituted the carry forward rule of 1955 in its place. But it must be made clear that the judgment of this Court in Devadasan 's case(2) is only concerned with that part of the instructions of the Government of India which deal with the carry forward rule; it does not in any Way touch the reservation for scheduled castes and scheduled tribes at 12 1/2% and 5% respectively; nor does it touch the filing up of scheduled tribes vacancies by scheduled ; 427 caste candidates where sufficient number of scheduled tribes are not available in a particular year or vice versa, The effect of the judgment in Devadasan 's case(1) therefore is only to strike down, the carry forward rule and it does not affect the year to year reservation for scheduled castes and sheduled tribes or filling up of scheduled tribe vacancies by a member of scheduled castes in a particular year if a sufficient number of scheduled tribe candidates are not available in that year or vice versa. This adjustment in the reservation between scheduled castes and tribes has nothing to do with the carry forward rule from year to year either of 1952 which, had ceased to exist or of 1955 which was struck down by this Court. In this view of the matter it is unnecessary to consider whether the carry forward rule of 1952 would be unconstitutional, for that rule no longer exists. This brings us to the last question whether the petitioner would be entitled to appointment on the basis that there was no carry forward rule in existence in 1960. Originally it was notified that the number of vacancies expected were 48. On that basis the reservation for scheduled castes would be 6 and for scheduled tribes would be 2.4. But as it is impossible to get 2.4 individuals and the reservation for scheduled tribes is a minimum of 5%, they would be entitled to three vacancies. Thus out of 48 expected vacancies, 9 would be reserved vacancies and 39 would be unreserved. Actually however the Public Service Commission recommended only 45 names. On the basis of 45, scheduled castes would be entitled to 5.625 vacancies (i.e. 6 vacancies) while scheduled tribes would be entitled to 2.25 vacancies (i.e. 3 vacancies). In actual effect however because one of the candidates recommended in the reserved quota died and one of the candidates out of the unreserved quota was appointed to another service, the Government of India made only 43 appointments. On this basis, the scheduled castes would be entitled to 5.375 vacancies (i.e. 6 vacancies) and the scheduled tribes to 2.15 vacancies (i.e. 3 vacancies). Thus on the actual appointments made the total reservation for scheduled castes and scheduled tribes would be 9 while 34 would be available for the unreserved quota. The petitioner secured 37th place in the unreserved quota. Out of these 37, one unreserved candidate was recruited to another service and thus the petitioner 's position may conceivably be said to have bettered and become 36th. According to the calculation which we have already indicated, 9 out of 43 vacancies actually filled will go to scheduled castes and scheduled tribes together and 34 (1) ; 428 would go to the unreserved quota. The petitioner however was 36th on the unreserved quota and therefore even on the basis of there being no carry forward rule only 34 candidates would be appointed from the unreserved quota and the petitioner being 36th on his own showing can not claim appointment. The petition therefore fails. In the circumstances we make no order as to costs. Petition dismissed.

In 1950 by a resolution of the Ministry of Home Affairs a reservation was fixed for scheduled castes and tribes to the extent of 12 1/2% and 5% respectively in respect of vacancies in public services to be filled from year to year. In 1952. a "carry forward" rule was introduced whereby the unfilled reserved vacancies of a particular year would be carried forward for on year only. In 1955 the above rule was substituted by another providing that the unfilled reserved vacancies of a particular year would be carried forward for two years. In 1960 a limited competitive examination was held by the Union Public Service Commission for promtion to the post of Section Officers. The petitioner who was an Assistant in the Central Secretariat Service appeared at this examination and secured the 37th rank. Although 43 appointments were made as a result of the examination the petitioner could not be appointed because under the 1955 "carry forward" rule as many as 28 vacancies were to be filled by Scheduled caste and scheduled tribes candidates. In 1963 the 1955 rule was declared invalid by this Court in Devadasan '.s case, whereupon the petitioner filed a petition under article 32. He claimed that the 1952 "carry forward" rule having been substituted by the 1955 rule, and the latter having been declared unconstitutional there was no "carry forward" rule in existence in 1960 and therefore by virtue of his rank in the examination he ought to be appointed to the post of Section Officer. HELD : (i) When L 1952 "cary forward" rule was substituted by the rule of 1955 the former ceased to exist. The 1955 rule having been declared unconstitutional in Devadasan 's case there was no "carry forward" rule in existence in 1960 when the petitioner appeared at the examination. [426 F G] (ii) It must made clear that the judgment of this Court in Devada.vans ' case was only concerned with that part of the instructions of the Government of India which deal with the "carry forward" rule; it did not in any way touch the reservation for scheduled castes and scheduled tribes at 12 1/2% and 5% respectively. This reservation had to be given effect to. After allowing for these reservations only 34 unreserved vacancies were left to be filled and the petitioner 's rank being lower, he could not succeed. [426 G H; 428 A B] T. Devadasan vs Union of India, ; , explained.

it Petition No. 1389 of 1987. (Under Article 32 of the Constitution of India). G. Ramaswamy, Additional Solicitor General, M.K. Rama murthy, Mrs. Shyamala Pappu, K.K. Venugopal, Gobind Mukhoty, M.A. Krishnamurthy, Ms. Chandan Ramamurthy, Dalveer Bhand ari, C. Ramesh, G.D. Gupta, L.K. Gupta, G. Venkatesh Rao, Ms. A Subhashini, Ms. Susma Suri, C.V.S. Rao, P. Parmeshwa ran, Mrs. Urmila Kapoor, Krishna Prasad, Indra Makwana and S.K. Jain, for the Appearing Parties. The Judgment of the Court was delivered by SAWANT, J. This petition is filed as stated in the petition by an Association of about 2,000 employees working in 500 Railway Institutes and Clubs in various parts of the country. Their grievance, as in the case of the petitioners in the matters pertaining the Railway Canteens, is that they are not treated as railway employees. It is their case that although the Institutes/Clubs in which they work are non statutory, they are on par with the employees in the statu tory canteens run in the Railway establishments proper. According to them, the Railway Institutes and Clubs were set up to provide recreational facilities to the railway employ ees. They are managed by Committees consisting of represen tatives of all the members of the Institutes/Clubs elected periodically. The Institutes/Clubs have the following cate gory of employees: (1) Manager (2) Accountant (3) Clerk (4) Librarian in 596 charge (5) Librarian (6) Watchman (7) Daftry (8) Watermen (9) Canteen employees (10) Billiards Marker etc. These employees are appointed by the Committee and their salaries are paid out of the contributions received from the members of the respective Institutes/ Clubs and the grants in aid given by the Railway Board to the Institutes/Clubs. The Committees of management is presided over by a president who is the concerned Divisional Railway Manager or his nominee. The Railway Administration has the right to dissolve or to from an ad hoc Committee. According to the petitioners further, the Railway Board has always treated the Institutes and Clubs as an integral part of the Railways, since they not only receive grants in aid but also other facilities from .the Govern ment. Section B of Chapter XXVIII of the Railway Establish ment Manual makes a special provision for the Institutes and Clubs. Paragraph 2808 of the Manual states that a Railway Institute should be looked upon as a club provided by the Railway, rent free for the benefit of its employees and therefore, the Railway should provide everything which a landlord ordinarily would, and the Institute should pay for all that a tenant would usually be liable to pay. Paragraph 2809 states that the Railway Administration will bear (a) the first cost of the building including the cost of elec tric installations with necessary furniture, roads, fences, tennis courts and other play grounds. Wherever possible a garden will also be provided; (b) the cost of maintenance and alterations. In the case of tennis courts and play grounds the Rail way Administration will bear only the cost of ordinary engineering repairs. The said paragraph however requires that the Institute funds should bear (a) the cost of roll ing, watering, grass cutting and other maintenance charges of play grounds, other than engineering repairs; (b) the cost of maintenance of its gardens and ornamental grounds; (c) the cost of maintenance and renewal, whether partial or complete, of electric installations (which include electric fans) payable at a flat rate of 5 per cent per annum on the capital cost of the installations; (d) the cost of electric current consumed and hire of meter; (e) the occupier 's share of municipal taxes for specific direct services rendered to an Institute by a municipality such as conservancy, water and the like taxes as distinct from taxes of a general nature; (f) water charges calculated at so much per tap, each Railway Administration fixing its own scale of charges. In cases where large quantities of water are supplied by the Railway Administration, as in the case of swimming baths, the actual cost of water supplied should be recovered. Para 597 graph 2810 provide that: (i) no rent is recoverable in the case of Railway buildings used as officers ' club provided conditions stipulated para 1942 E are fulfilled; (ii) no rent is recoverable in the case officers ' clubs if the buildings are specially constructed against amounts specifi cally sanctioned by the Railway Board (iii) no rent is recoverable in the case of clubs, if additional expenditure is incurred in converting an existing building into a club or providing anciliaries to make it suitable as a club. if the expenditure is incurred with the specific approval of the Railway Board and (iv) no rent is recoverable in the case of clubs where the building is erected by the club at its costs on Railway land. Paragraph 28 11 further provides that: Class IV staff employed in Railway Institutes may be given residential accommodation free of rent provided such accommodation is either part and parcel of the Institute building and its recognised out houses, or is not required for any other railway purpose, or cannot be rented to out siders and would otherwise lie vacant. According to para graph 28 13 the membership of the Institute/Club is option al. Paragraph 28 17 gives powers to the respective General Managers to frame rules to suit local requirements of the Railway Administrations and other circumstances of the place. The employees of the Institutes/Clubs are entitled to free passes, and to get medical facilities provided by the Railway Hospitals. The employees belonging to Class IV are eligible for absorption in the Railways and for that purpose they are given relaxation in age. The petitioners, therefore, claim that they should be treated on the same par as the employees in statutory can teens and non statutory canteens there being no difference in their status. The petition is resisted on behalf of the respondent Union of India. According to the respondents, the Institutes and Clubs have their origin in the rules regarding Staff Benefit Fund which is provided for in Chapter VIII of Rail way Establishment Code Vol. 1 (1985 edition). According to the rules contained in this Chapter as clarified/ modified by the administrative instructions from time to time. the main objectives of the Fund are to provide additional ameni ties to the railway servants and their families in the sphere of education, recreation, relief to the distressed, financial assistance during sickness and development of sports and scouting activities. The Fund consists of contri bution from Railway revenues at the rate of Rs. 14 per capita of the sanctioned strength of non gazetted employees as on 3last March of each year. The contribution of Rs. 14 is broadly apportioned amongst 598 various spheres of activities as under: (i) (a) Education 2.50 (b) Recreation other than sports 2.00 (c) Relief of distress, sickness etc. 3.50 (d) Miscellaneous items 0.50 (ii) Sports activities 2.50 (iii) Scouts activities 1.00 (iv) Recreational facilities to officers 2.00 and supervisory staff According to the respondents further, as per the provi sions of the Railway Establishment Code and the Establish ment Manual, the Institutes and Clubs are managed by a committee representing its membership. It is the Managing Committee which engages such staff as is required and meets the cost of their wages and allowances. The conditions of service including the scales of pay of the staff are decided upon by the respective Managing Committees and hence they vary from Institute to Institute and Club to Club. The cost of the staff running the institute including the pay bill of the staff is met by the Managing Committee from membership fees and from grants received from the Staff Benefit Fund. As will be evident from the apportionment of the per capita grant among the various activities, only a sum of Rs.4 per capita comes to the share of the recreational facilities. The funds available for recreational facilities are further limited because the membership of the Institutes/Clubs is optional. These facilities further, in the nature of things, are availed of by the members for a few hours beyond working hours. The Managing Committees therefore, engage only part time staff. They engage full time staff only when it is considered absolutely necessary. There are about 449 Insti tutes and 332 Clubs and they have engaged about 1741 employ ees of whom about 887 are on full time basis, the rest being engaged on part time basis. The whole time employees are allowed passes and Privilege Ticket Orders on a restricted scale in terms of para 1526 of the Railway Establishment Manual. It is, therefore, contended on behalf of the respond ents, that the Railways are not the principal employers of the staff engaged in the Institutes/Clubs and they have no control whatsoever on it. The staff is not paid directly from the Consolidated Fund of India. Whatever facilities are provided to the whole time staff are provided only as a 599 special case, and not on account of any obligation under any law. It is also contended that in fact it is the Managing Committees who have engaged the staff and they ought to have been joined as parties to the petition. The respondent Union of India having no relationship with the employees, the petition is liable to be dismissed on account of non join der/mis joinder of parties. The respondent have also ques tioned the locus standi of the present Association to file the petition since according to them no such Association exists. The respondent further point out that the Managing Committees of the Institutes/Clubs do not receive any subsi dy or loan from the Railways for meeting specifically the wage bill of the employees as do the Managing Committees of the statutory/non statutory recognised canteens and, there fore, the present employees stand on a different footing than that of the employees in the statutory/non statutory recognised canteens. In reply to the contention of the petitioners that the rules framed for the constitution of Managing Committees of the Institutes/Clubs give power to the Railway Administration to dissolve the Managing Commit tees or to appoint ad hoc Committees, it is pointed out that these rules are framed locally by General Managers of Zonal Railways, Production Units etc. in terms of the provisions contained in para 2817 of the Establishment Manual. They are not uniform and not all rules so framed provide for either the dissolution of the Managing Committee or appointment of ad hoc Committee by the Railway Administration. The respond ents also deny that the Railway Board has treated Insti tutes/Clubs as an integral part of the Railways. It is also pointed out that the Railway free passes and privilege ticket orders are given only to the full time employees as a special case. But even they are given on a restricted scale. As regards the medical facilities, again, it is pointed out that it is given to the employees and not to their family members or dependent relatives. As regards the facilities of absorption in the Railways by relaxing the age limit, the respondent points out that it is not only this staff but also the staff of cooperative societies, canteen commission bearers, vendors of departmental canteen who are eliteble for such relaxation in age limit to the extent of the serv ice rendered in such organisation whichever is less, for appointment in Group D categories. But they have to appear before Railway Service Commissions/Railway Recruitment Board alongwith casual labourors and substitutes, and they are considered only after the eligible casual labourers and substitutes are considered. It is lastly submitted on behalf of the respondents that although there is no obligation on the Railways, the Railways have issued administrative in structions to the Zonal Railways etc. that whenever it is found 600 absolutely necessary by the Managing Committees of the Institutes/ Clubs to employ staff on full time basis they should be paid remuneration keeping in view the local market conditions. It is also the contention of the respondents that the Railways are providing financial assistance/grants in aid for various non welfare activities and to non railway agen cies such as private schools run in the railway colonies, cooperative societies/banks etc. Since the employees engaged in these activities/non railway organisations do not ipso facto become railway servants, the employees of these Insti tutes/Clubs can also not become the railway employees for the same reason. The service in the railway Institutes/Clubs is purely in the nature of private employment. On the other hand, the railway employees are recruited according to the rules of recruitment. They are subjected to rigorous stand ards with regard to age limit, educational qualifications, medical fitness, interviews, character verification etc. as well as to stiff competition. To treat the employees in Railway Institutes/Clubs as railway employees would amount to a back door entry of these employees to Government serv ice without following the regular procedure. It is also contended by them that the letters of appointment offered to these employees by the respective Managing Committees make it clear that they are not to be treated as railway serv ants. For all these reasons, these employees form a separate class and they are not comparable with any other category of staff of the Railways. It is also submitted on behalf of the respondents that the analogy of the employees in railway canteens is not applicable to these employees because the status of the canteen employees is itself being contested by the respondents. It is lastly contended that if this Court deems it proper to treat the full time employees of the Institutes/Clubs as railway servants it will have to be left open to the Respondents to frame such rules as it considered necessary for the efficient running of the Institutes/Clubs and for engaging such staff as are considered necessary. If the employees concerned are then directed to be absorbed only subject to the requisite standards of age, educational qualifications etc. and only such of them as are found suitable, many of the present employees may be faced with unemployment which will not be in the interests of the employees themselves. After considering the respective contentions of the parties and the documents on record, we are of the view that there is a material difference between the canteens run in the Railway establishments, and the Railway Institutes and Clubs. In the first instance, the canteens are invariably a part of the establishments concerned. They 601 are run to render services during the hours of work since the services, by their very nature are expected directly to assist the staff in discharging their duties efficiently. The lack of canteen facilities is ordinarily bound to hamper and interfere with, the normal working of the staff and affect their efficiency. The importance of the services rendered by the canteens to the staff in the day to day discharge of their work therefore needs no further emphasis. Suffice it to say that the canteen services are today re garded as a part and parcel of every establishment. So much so that they have been made statutorily mandatory under the in establishments governed by the said Act where more than 250 workers are employed. The canteen services are thus no longer looked upon as a mere welfare activity but as an essential requirement where sizable number of employees work. That is why even the Railway Administration has, by its Establishment Manual made a provision for canteens even where the does not apply, and has laid down procedure for their registration and approval and for extending to them almost the same facilities and monetary assistance as in the case of the statutory canteens. However, the same cannot be said of the Institutes and Clubs. Although for them also the Railway Establishment Manual makes provisions in the same Chapter XXVIII dealing with Staff Welfare, the provisions are of a materially different nature and pattern. In the first in stance, there is no provision either for subsidy or loan directly from the funds of the Railway Administration. The Institutes/Clubs have to run on the membership fees and fixed grants received from the Staff Benefit Fund. The Fund consists of receipts from the forfeited provident fund and bonus, and of fines. The grant is made as pointed out by the Respondents, to each Institute/Clubs at the rate of Rs. 14 per capita of the non gazetted staff employed at the rele vant establishment. Out of this contribution, only Rs.4 per capita are spent on the activities of the Institutes and Clubs, the rest of the amount being spent on education, relief in case of distress and sickness, sports, scouts activities and for other miscellaneous purposes. There is further no dispute that the wages and allowances of the staff of the Institutes/Clubs are paid by the Institutes/Clubs themselves and they are not subsidised by the Railway Administration as in the case of the statutory and nonstatutory recognised canteens. By their very nature further the services of the Institutes/ Clubs are availed of beyond working hours only. It is common knowledge that not all members of the Railway staff avail of them. One has to be a member to do so by paying fees. The membership is also optional. That is why most of the staff employed in the Institutes/ 602 Clubs is part time. As has been stated by the respondents, out of about 1741 employees engaged in 449 Institutes and 332 Clubs nearly half are part time employees. The services rendered by the employees are not of a uniform nature. They are engaged for different services with different, service conditions according to the requirement. The Institutes/Clubs further do not engage in uniform activi ties, the activities conducted by them varying depending upon the infrastructure and the facilities available at the respective places. What is more importance as far as the issue involved in this petition is concerned, is that the provision of the Institutes/Clubs is not mandatory. They are established as a part of the welfare measure for the Railway staff and the kind of activities they conduct depend, among other things, on the funds available to them. The activities have to be tailored to the budgets since by their very nature the funds are not only limited but keep on fluctuating. If the costs of the activities go beyond the means, they have to be curtailed. So also, while starting a new activity, it is necessary to take into account its financial implications and the capacity of the Institute/Club to raise the neces sary funds. The only varying component of the funds is the membership fee which is uncertain. If as contended by the petitioner Association the workers engaged in these Institutes/Clubs are treated as Railway employees, the danger is that these welfare activi ties which are otherwise encouraged by the Railway Adminis tration may in course ' of time shrink and cease altogether for want of funds. This will not be in the interests of the workers themselves. One cannot lose sight of the fact that today the emoluments of government servants including those of the Railway employees, may they belong to Class IV or to a higher category, are substantial and inhibit fresh re cruitment. The services rendered by a government agency, therefore, become costly and uneconomical. Compared to the services which are rendered by the Institutes/Clubs and the benefits which flow from them, an increase in their adminis trative expenditure which may result from granting the status of the railway employees to their workers. will be disproportionately high and forbidding. This will also have a snow bailing effect on other welfare activities carried on by the Railways and similar activities carried on by all other organisations. We also cannot lose sight .of fact that the workers engaged in the welfare activities today are drawn from the respective localities without restrictions of the qualifications of education, age etc. Whatever little scope for employment is available to the local population at the respective places may 603 also vanish with the cessation of these activities. After all, the number of employees who may benefit by becoming railway employees does not today exceed 887 who are the full time employees scattered all over the country. But, they may deprive many of their bread in the presenti and in the future. For, as pointed out by the Respondents, if the Railway Service Rules are made applicable, many of the present employees will also have to face immediate unemploy ment. This is of course yet a larger related socio economic consideration. On the facts placed before us which we have discussed above, we are also not persuaded to hold that there is a relationship o[ employer employee between the Railway Admin istration and the employees engaged in the Institutes and Clubs. Neither law nor facts spell out such relationship. If the present service conditions of these employees are unsat isfactory, the remedy lies elsewhere. lO. Since we are disposing of the petition on merits, it is not necessary to deal with the legal contentions raised on behalf of the Respondents that the petitioner Association has no locus standi and that the petition is not maintain able for non~joinder and/or misjoinder of the parties. In the result, we dismiss the Writ Petition and discharge the rule with no order as to costs. R. N.J. Petition dismissed.

This petition under Article 32 of the Constitution of India has been filed by an Association of about 2,000 em ployees working in 500 Railway Institutes and Clubs in various parts of the country claiming that they should be treated on the same par as the employees in the Statutory Canteens run by the Railway Administration. In support of their claim the petitioners while enumerating the range of activities handled by them, they have attempted to draw a parallel with the regular employees contending inter alia that not only they receive grants in aid and a number of facilities from the Govt. , the Railway Board has always treated these institutes and clubs as an integral part of the Railways. The Respondents resisted the petition stoutly and con tended that the Institutes and Clubs are managed by a Com mittee representing its membership which engages such staff as is required and meets the cost of their wages and allow ances etc., that the Railways are not the principal employ ers of their staff, that they are not paid directly from the Consolidated Fund of India and whatever facilities are provided to them they are confined to the wholetime staff as a special case and not on account of any obligation under any law. On consideration of respective contentions and documents on record while dismissing the petition, this Court. HELD: There is a material difference between the can teens run in the Railway establishments and the Institutes and Clubs. The Institutes/ Clubs have to run on the member ship fees and fixed grants received from the Staff Benefit Fund. The fund consists of receipts from the forfeited provident fund and bonus, and of fines. The grant is made as pointed out by the Respondents, to each Institute/Club at the rate of 595 Rs. 14 per capita of the non gazetted staff employed at the relevant establishment. Out of this contribution, only Rs.4 per capita are spent on the activities of the education. relief in case of distress and sickness, sports, scouts activities and for other miscellaneous purposes. There is further no dispute that the wages and allowances of the Staff of the Institutes/Clubs are paid by the Institutes/Clubs themselves and they are not subsidised by the Railway Administration as in the case of the statutory and non statutory recognised canteens. [600H] 160 [E F & G] On the facts, it cannot be held that there is a rela tionship of employer employee between the Railway Adminis tration and the employees engaged in the Institutes and Clubs. Neither law nor facts spell out such relationship. If the present service conditions of these employees are unsat isfactory, the remedy lies elsewhere. [603B C]

: Civil Appeal Nos.203 7 2042 of 1977 etc. From the Judgment and Order dated 21.10.1976 of t he Rajasthan High Court in D.B. Special appeal Nos. 8, 20, 2 2, 26, 27 and 28 of 1976. A.K. Sen, V.M. Tarkunde, Shanti Bhushan, Sushil Kum ar Jain, N.D.B. Raju, Ram Kalyan Sharma,Jagdish Nandware, K. B. Rohtagi, S.K. Dhingra, R.S. Sodhi and Vineet Kumar for the Appellants. C.M. Lodha, Badri Dass Sharma, S.D. Khanduja and Ind ra Makwana for the Respondents. The Judgment of the Court was delivered by VENKATACHALIAH, J. These appeals, by Special Leave a nd Petitions for grant of Special Leave pertaining to agrari an reform legislation in the State of Rajasthan, arise out of and are directed against the judgment dated 21st Octobe r, 1976, of a full bench of the High Court of Rajasthan, di s missing a batch of special appeals and affirming the jud g ment dated 2.12.1975 of the learned Single Judge of the Hi gh Court rejecting appellants contentions against the legali ty of certain proceedings for the fixation of ceiling on agr i cultural holdings initiated and continued under the Prov i sions of Chapter III B of the Rajasthan Tenancy Act, 195 5. In the Writ petition filed directly in this Court relie fs similar to those sought before the High Court are claimed. The principal controversy before High Court in t he proceedings, shorn of its niceties and embellishments, w as whether the proceedings for fixation of ceiling area wi th reference to the appointed dated i.e. 1.4.1966 under Chapt er III B of the Rajasthan Tenancy Act, 1955, 157 ( '1955 Act ' for short) could be initiated and continu ed after the coming into force of the Rajasthan Imposition of Ceiling on Agricultural Holdings Act (Act No. 11 of 197 3) ( '1973 Act ' for short) which w.e.f.1.1.1973 repealed Se c tion 5(6A) and Chapter III B of the old Act, i.e. ' 19 55 Act '. Chapter III B, pertaining to imposition of ceiling on agricultural holdings, in the State of Rajasthan, was intr o duced into the '1955 Act ' by the Rajasthan Tenancy (Amen d ment) Act, 1960. As a sequential necessity Section 5 w as amended by the introduction in it of Clause (6A) whi ch defined "ceiling area". The notified date, as original ly fixed, was 1.4.1965; but owing to the uncertainties impart ed to the implementation of the law by the challenge made to the provisions of Chapter III B before the High Court a nd the interim orders of the High Court staying the operati on of the law, Government had had to re notify 1.4.1966 as t he fresh notified date, after the challenge to the validity of Chapter III B had been repelled by the High Court. By the time, the '1973 Act ' was brought into for ce disputes touching the determination of the ceiling areas in 33,471 cases had come to be decided in accordance with t he provisions of Chapter III B of the earlier '1955 Act '. After the '1973 Act ' came into force on 1.1.1973, some 8,4 94 cases for the determination of 'ceiling areas ' under III B of the '1955 Act ' came to be initiated and were sought to be continued under said Chapter III B of the repealed '19 55 Act ' on the view that the repeal of Chapter III B of t he 1955 Act by the 1973 Act ' did not affect the rights accrued and liabilities incurred under the old law. Appellant s ' principal contention is that after the coming into force of the 1973 Act which, by its 40th Section, repealed Chapt er III B of the ' 1955 Act ', recourse could not be had to t he repealed law for purposes of commencement, conduct a nd conclusion of any proceedings for fixation of ceiling as prescribed under the old law. This contention has be en repelled by the full bench of the High Court in the judgment under appeal. The correctness of view of the full ben ch arises for consideration in these appeals. The factual antecedents in which the controver sy arose before the High Court may be illustrated by the facts of one of the appeals. In CA 1003(N) of 1977, the appe l lants ' claim to have entered into possession and cultivati on of certain parcels of land pursuant to alleged agreements to sell dated 28.4.1957 said to have been executed in the ir favour by the then land holder, a certain Sri Hari Sing h. The sale deeds were passed only on 22.8.1966, after t he notified date. Proceed 158 ings for the fixation of ceiling area in the hands of S ri Hari Singh were commenced under the Repealed Chapter III B of the '1955 Act '. Appellants ' pruchases were held to be hit by Section 30 DD of the said Chapter III B, which prescrib ed certain residential qualifications, which appellants did n ot possess, for the eligibility for recognition of such transfers. Appellants ' contention is that if the new law had be en applied to the case of the vendor, the transfers in the ir favour would have been held valid and that invoking of Chapter III B of the repealed law was impermissible. Apart from the facts of individual cases and their particularities the basic question is one of construction whether the provisions of the old law are saved and survive to govern pendi ng cases. We have heard Sri A.K. Sen, Sri Tarkunde and S ri Shanti Bhushan, learned Senior Advocates for the appellan ts and Sri Lodha, learned Senior Advocate for the State of Rajasthan and its authorities. The appellant 's principal contention which we perceive as one of construction of statutes is that the later law made manifest, expressly a nd by necessary implication, an intention inconsistent with t he continuance of the rights and obligations under the repeal ed law and that, accordingly, after 1.1.1973, the date of coming into force of the '1973 Act ', no proceedings und er the old law could be initiated or continued. The points that fall for consideration in these appeals are whether: (a) the scheme contemplated by and the different criter ia and standards for the determination of "ceiling area" envi s aged in the '1973 Act ' and, in particular, having regard to the limited scope of the saving provision of Section 40 thereof which, quite significantly, omits to invoke a nd attract Section 6 of the Rajasthan General Clauses Act 19 55 to the Repeal of Section 5(6A) and Chapter III B of t he '1955 Act ' must be construed and held to manifest an inte n tion contrary to and inconsistent with the keeping alive or saving of the repealed law so as to be invoked in relati on to and applied for the pending cases which had not be en concluded under the old law before the repeal; and (b) that, at all events, even if Section 6 of the Rajasth an General Clauses Act 1955 was attracted and the old law w as saved for the purpose, provisions of the old law could n ot be invoked as no right had been ,"accrued" in favour of 159 the State in relation to the surplus area determinable und er the old law nor any liability "incurred" by the land holde rs under the old law so as to support the initiation of t he proceedings for fixation of 'Ceiling area ' under the old l aw after its repeal. Re: Contentions (a) In order that this contention, which is presented wi th some perspicuity, is apprehended in its proper prospective a conspectus of the essential provisions of the earlier l aw and later law pertaining to prescription of ceiling on agricultural holdings is necessary. In 1955, The Rajasthan Tenancy Act 1955 was enacted. By the Rajasthan Tenancy (Amendment) Act, for the first time, provisions in Chapter III B prescribing a ceiling on hol d ings of agricultural lands got introduced into the '19 55 Act '. This amending Act of 1960 received Presidential asse nt on 12th March 1960. The Chapter III B was, by an appropria te notification, brought into force with effect from 15 th December, 1963. The notified date, under the '1955 Act ', as stated earlier, was 1.4.1965. Section 5(6A) of the ' 1955 Act ' defined 'Ceiling area '. " "Ceiling area" in relation to land held anywhe re throughout the State by a person in any capacity whatsoeve r, shall mean the maximum area of land that may be fixed as ceiling area under section 30C in relation to such person; " Section 30B in Chapter III B provided: "30B. Definitions For the purposes of this Chapter (a) "family" shall mean a family consisting of a husband and wife, their children and grand children bei ng dependent on them and the widowed mother of the husband so dependent, and (b) "person" in the case of an individual, sha ll include the family of such individual. " Section 30C providing for the extent of ceiling area said: 160 "30C. Extent of ceiling area The ceiling area for a family consisting of five or le ss than five members shall be thirty standard acres of land; Provided that, where the members of a family exce ed five, the ceiling area in relation thereto shall be increased for each additional member by five standard acre s, so however that it does not exceed sixty standard acres of land. Explanation A 'standard acre ' shall mean the ar ea of land which, with reference to its productive capacit y, situation, soil classification and other prescribed partic u lars, is found in the prescribed manner to be likely to yield ten maunds of wheat yearly; and in case of land n ot capable of producing wheat, the other likely produce there of shall, for the purpose of calculating a standard acre, be determined according to the prescribed scale so as to be equivalent in terms of money value to ten maunds of wheat: Provided that, in determining a ceiling area in terms of standard acres the money value of the produce of wellirrigated (chahi) land shall be taken is being equiv a lent to the money value of the produce of an equal area of un irrigated (barani) land. " In exercise of the Rule making powers under the '1955 Act ', the State Government framed and promulgated The Rajasth an Tenancy (Fixation of Ceiling of Land) Government Rule s, 1963, which came into force on and with effect fr om 15.12.1963. Rule 9 required that in order to enable t he Sub Divisional Officer to determine the ceiling area a p plicable to every person under Section 30C of the Act and to enforce the provisions of Section 30E, every land holder a nd tenant in possession of lands, in excess of the ceiling ar ea applicable to him, shall file a declaration within si x months from the notified date. The law fixed 30 standa rd acres as the ceiling area. Thereafter, successive amendmen ts were made to Chapter III B of the '1955 Act ' which, whi le maintaining the ceiling at 30 standard acres, howeve r, recognised certain transfers effected after 1958, which we re not originally so recognised in fixing the ceiling. Aga in (by an amendment) of the year 1970, Section 30 (1) w as deleted. The 1955 Act itself came to be included in the IX Schedule to the Constitution by a Parliamentary law. T he challenge to 161 said inclusion was repelled by this Court. On 1.1.1973, the Governor of the State of Rajasth an promulgated The Rajasthan Imposition of Ceiling on Agrilcu l tural Holdings Ordinance, 1973 under Article 213 of t he Constitution of India. The Ordinance repealed the corr e sponding provisions relating to ceiling on agricultur al holdings contained in Section 5(6A) and Chapter III B of t he '1955 Act ' except to the extent indicated in the Seco nd proviso to Section 4(1) and Section 15(2) of the said Ordinance. The Ordinance brought into existence a new concept of and standards for the "ceilingarea". Certain transfers ma de by the land holders even during the operation of the old l aw were recognised as valid transfers for purposes of comput a tion of ceiling area under the new dispensation broug ht about by the Ordinance. This Ordinance was replaced by t he 1973 Act which was made operative retrospectively fr om 1.1.1973 being the date of promulgation of the Ordinanc e. Section 40 of the '1973 Act ' repealed, as did the predece s sor Ordinance, both the old law in Chapter III B of t he '1955 Act ' and the earlier Ordinance for which it substituted. Section 3, Section 4(1), Second Proviso and Section 40 of the 1973 Act require particular notice. Section 3 provides: "3.Act to override other laws, contracts, etc. The provisions of this Act shall have effect notwithstandi ng anything inconsistent contained in any other law for t he time being in force, on any custom, usage or contract or decree or order of a court or other authority. " The Second Proviso to the Explanation appended to Se c tion 4(1) of the Act says: "Provided further that if the ceiling area applicable to a ny person or family in accordance with this section exceeds t he ceiling area applicable to such person or family accordi ng to the provisions of law repealed by section 40, in th at case the ceiling area applicable to such person or fami ly will be the same as was under the provisions of the sa id repealed law." Section 40 provides: "40.Repeal and savings (1) Except as provided in seco nd proviso to sub section (1) of section 4 and in subsection (2) of Section 15 of this Act, the provisions of clause (6 A) of section 5 and Chapter III B of the Rajasthan Tenancy Act, 2955 (Rajasthan Act 3 of 2955) are hereby repealed except in the Rajasthan Canal Project area wherein such provisio ns shall stand repealed on the date on which this Act com es into force in that area. (2) The Rajasthan Imposition of Ceiling on Agricu l tural Holdings Ordinance, 1973 (Rajasthan Ordinance I of 1973) is hereby repealed. (3) Notwithstanding the repeal of the said Ord i nance under sub section (2), anything done or any acti on taken or any rules made under the said Ordinance shall be deemed to have been done, taken or made under this Act a nd section 27 of the Rajasthan General Clauses Act, 29 55 (Rajasthan Act 8 of 1955) shall apply to such repeal a nd re enactment. " Section 41 contains a statutory declaration that the 'Act ' is for giving effect to the directive principles of State policy towards securing the principles specified in Article 39(b) and (c) of the Constitution of India. Appellants ' learned counsel contend that when the re is a repeal of a statute followed by a re enactment of a n ew law on the same subject, with or without modification s, Section 6 of the General Clauses Act is not attracted a nd the question as to the extent to which the repealed law is saved would be dependent upon the express provisions of t he later statute or what must be held to be its necessary a nd completing implications. It was urged that where the repeal is accompanied by a afresh Legislation on the same subject, the new law alone will determine if, and how far, the old law is saved and that in the absence of an express appeal to Section 6 of the General Clauses Act or of express prov i sions to similar effect in the new law itself, the prov i sions of the old law must be held to have been effac ed except whatever had been done, or having effect as if done. This argument has the familiar ring of what Sulaiman, C J. had said on the matter in Rashid Ahmad vs Mt. Anis Fatima & Ors., AIR 1933 All. 3. But it 163 must now be taken to be settled that the mere absence of an express reference to Section 6 of the General Clauses Act is not conclusive, unless such omission to invoke Section 6 of the General Clauses Act is attended with the circumstan ce that the provisions of the new law evince and make manife st an intention contrary to what would, otherwise, follow by the operation of Section 6 of the General Clauses Act, t he incidents and consequences of Section 6 would follow. Appellants ' learned counsel submitted that the legislation in question pertaining, as it did, to the topic of agrarian reform was attendant with the difficulties naturally besetting a task so inextricably intermixed with compl ex and diverse and, indeed, often conflicting socio economic interests had had to go through stages of empirical evol u tion and that having regard to the wide diversity of policy options manifest between the earlier and the later legislations, the conclusion becomes inescapable that t he later legislation, made manifest an intention inconsistent with and contrary to the continuance of the rights a nd obligations under the repealed law. It was agreed that wi th the experience gained in the implementation of the policy of agrarian reforms embodied in the repealed law, the n ew policy considerations reflected in the new and basical ly different thinking on some of the vital components of t he new policy were evolved and incorporated in the new law, so much so that the repealed and repealing laws represented t wo entirely different systems and approaches to the policy of agrarian reforms and the two systems, with their mark ed differences on basic and essential criteria underlying the ir policies, could not co exist. It was urged that the stat e ment of objects and reasons appended to the 1973 Bill reco g nised that the legislative policy and technique underlyi ng the old law were ineffective in removing the great dispari ty that persisted in the holdings of agricultural lands or in diluting the concentration of agricultural wealth in t he hands of a few and recognised the necessity "to reduce su ch disparity and to re fix the ceiling area on the agricultur al holdings so that agricultural land may be available f or distribution to land less persons". It was pointed out th at material criteria relevant to the effectuation of the ne w policy made manifest an intention contrary to the surviv al of the policy under the old law. The wide changes in t he policy of the later law which reflected a new and basical ly different approach to the matter, included (i) a fundament al rethinking on the concept of the "ceilling area" by reduci ng the 30 standard acres prescribed in the old law to 18 stan d ard acres; (ii) the re definition of the very concept of 'family ' and 'separate unit '; (iii) the point of time wi th reference to which the composition and strength of t he family would require to be ascertained; (iv) a re 164 thinking, and a fresh policy as to the recognition of tran s fers made by land holders including even those transfe rs made during the period of operation of the old law; (v) t he point of time of the vesting of the surplus land in Gover n ment; (vi) the re defining of the principles and prioriti es guiding the distribution of the surplus land to landle ss persons, and (vii) the amount to be paid to the land holde rs for the excess land vesting in the State under the new law . It was submitted that the two laws the old and t he new envisaged two totally different sets of values a nd policies and were so disparate in their context and effe ct as to yield the inevitable inference that the policy a nd scheme of the later law, by reason alone of the peculiar i ties and distinction of its prescriptions, should be held to manifest an intention contrary to the saving of the old l aw even respective pending cases. The ceiling laws, it w as submitted, envisage and provide an integrated and inte r connected set of provisions and the marked distinctions in the vital provisions in the two sets of laws rendered t he continued applicability of the old law to any case, n ot already finally concluded thereunder, as impermissible in law as unreasonable in its consequences if permitted. It w as urged that Section 3 of the 1973 Act was a clinching indic a tor in this behalf when it provided that the provisions of the later law "shall have effect notwithstanding anythi ng inconsistent contained in any other law for the time bei ng in force, or any custom, usage, or contract or decree or order of a Court or other authority" (underlining supplie d) and that the old Act, even if it was, otherwise, held to be in force in relation to pending cases, was clearly ove r borne by Section 3 of the new law. When there is a repeal of a statute accompanied by reenactment of a law on the same subject, the provisions of the new enactment would have to be looked into not for t he purpose of ascertaining whether the consequences envisag ed by Sec.6 of the General Clauses Act ensued or not Sec. 6 would indeed be attracted unless the new legislation man i fests a contrary intention but only for the purpose of determining whether the provisions in the new statute ind i cate a different intention. Referring to the way in whi ch such incompatibility with the preservation of old rights and liabilities is to be ascertained this Court in State of Punjab vs Mohar Singh, ; said: "Such incompatibility would have to be ascertained from a consideration of all the relevant prov i sions of the new Law and the mere absence of a saving clause is by itself not material. The provision of Sec.6 of 165 the General Clauses Act will apply to a case of repeal ev en if there is simultaneous enactment unless a contrary inte n tion can be gathered from the new enactment. Of course, the consequences laid down in Section 6 of the Act will app ly only when a statute or regulation having the force of a statute is actually repealed" . Addressing itself to the question whether, having rega rd to the particular provisions of the 1973 Act, the inferen ce that the new law manifests such contrary intention cou ld justifiably be drawn, the High Court observed: "We have, therefore, to examine whether the n ew law expressly or otherwise manifests an intention to wi pe out or sweep away those rights and liabilities which h ad accrued and incurred under the old law . " "Having carefully gone through all the authoriti es cited by the parties as referred to above, we are of opini on that the new Act of 1973 does not have the sweeping effe ct of destroying all the rights accrued and liabilities i n curred under the old law . . " 10. One of the indicia that the old law was not effac ed is in sec.15(2) of the new Act. It provides that if t he State Government was satisfied that the 'ceiling area ' in relation to a person as fixed under the old law had be en determined in contravention of that law, a decided ca se could be re opened and inquired into it and the 'ceilin g area ' and the 'surplus area ' determined afresh in accordan ce with the provisions of the old law. Another indicium is in Sec.40(1) read with the Second Proviso to Sec.4(1) o f ' 1973 Act ' which provides that if the ceiling area applicab le to a person or a family in accordance with the said Se c. 4(1) exceeds the 'ceiling area ' applicable to such perso ns or family, under the old law, then, the 'ceiling are a ' applicable to such person or family would be the same as w as provided under the provisions of the old law. The High Court relied upon and drew sustenance for i ts conclusion from, what it called, the internal evidence in the Act which, according to the High Court, indicated th at pending cases were governed only by the old law. The Hi gh Court referred to sec.15(2) inserted by Act No. 8 of 19 76 and what, according to it, necessarily flowed from it in support of its conclusion. 15(2) inserted by Act No. 8 of 1976 166 "(2) Without prejudice to any other remedy that m ay be available to it under the Rajasthan Tenancy Act, 19 55 (Rajasthan Act 3 of 1955), if the State Government, aft er calling for the record or otherwise, is satisfied that a ny final order passed in any matter arising under the prov i sions repealed by Section 40, is in contravention of su ch repealed provisions and that such order is prejudicial to the State Government or that on account of the discovery of new and important matter or evidence which has since come to its notice, such order is required to be re opened, it ma y, at any time within five years of the commencement of th is Act, direct any officer subordinate to it to re open su ch decided matter and to decide it afresh in accordance wi th such repealed provisions." (Emphasis Supplied) The High Court referring to the opening words of t he above provisions observed: "The opening words of the section 'without prejudice to a ny other remedy that may be available to it under the Rajasth an Tenancy Act, 1955 (Act No. 3 of 1955) ', clearly show th at the pending cases have to be governed by the old law. If transactions past and closed have to be reopened and decid ed afresh under the provisions of the repealed law, and t he ceiling area under Chapter III of the Rajasthan Tenancy Ac t, 1955, has to be fixed under its repealed provisions, then it must follow as a necessary corollary, that the pending cas es must be decided under the old law. Sri Lodha, learned counsel for the State of Raja s than submitted that the 'ceiling area ' had to be fixed wi th reference to the notified date i.e. 1.4.1966 by the statut o ry standards prescribed under the Chapter III B of the '19 55 Act '. The two legislations are complementary to each oth er and constitute two tier provisions. So far as the cases th at attracted and fell within Chapter III B of 1955 Act, as on 1.4.1966, would continue to be governed by that law as t he fights and obligations created by the said Chapter III B amounted to create rights and incur liabilities. Shir Lod ha submitted that the view taken by the High Court was unexce p tionable. On a careful consideration of the matter, we are i n clined to 167 agree with the view taken by the High Court on the poin t. The reliance placed by appellants ' learned counsel on t he provisions of Sec. 3 of 1973 Act as detracting from t he tenability of the conclusion reached by the High Court on the point is, in our opinion, somewhat tenuous. The conte n tion of the learned counsel is that the expression "notwit h standing anything inconsistent contained in any other l aw for the time being in force" in Section 3 of the 1973 A ct would exclude the operation of Chapter III B of the '19 55 Act ' which, according to the contention, even if kept ali ve would yet be a 'law for the time being in force ' and, ther e fore, be excluded by virtue of Section 3. This contention has been negatived by the High Court and in our opini on rightly by placing reliance on the pronouncements of th is Court in Rao Shiv Bahadur Singh and Anr vs The State of Vindhya Pradesh, ; and ' Chief Inspector of Mines vs K.C. Thapar, ; The High Court he ld that the expression "law for the time being in force" do es not take within its sweep a law 'deemed to be in force ' and that, accordingly, the opening words of Sec. 3 relied up on by the Appellants ' learned counsel will not have an overri d ing effect so as to exclude the old law. A saving provision in a repealing statute is n ot exhaustive of the rights and obligations so saved or t he rights that survive the repeal. It is observed by this Court in 1.T. Commissioner, U.P. vs Shah Sadiq & Sons, at 1221: " . .In other words whatever rights are expressly saved by the 'savings ' provision stand saved. Bu t, that does not mean that rights which are not saved by t he 'savings ' provision are extinguished or stand ipso fac to terminated by the mere fact that a new statute repealing t he old statute is enacted. Rights which have accrued are sav ed unless they are taken away expressly. This is the princip le behind Sec.6(c), . " We agree with the High Court that the scheme of the 1973 A ct does not manifest an intention contrary to, and inconsiste nt with, the saving of the repealed provisions of sec.5(6 A) and Chapter III B of '1955 Act ' so far as pending cases a re concerned and that the rights accrued and liabilities i n curred under the old law are not effaced. Appellant 's co n tention (a) is, in our opinion, insubstantial. Re: Contention(b): This takes us to the next question whether in the prese nt cases 168 even if the provisions of Sec. 6 of the Rajasthan Gener al Clauses Act, 1955, are, attracted, the present cases did n ot involve any rights "accrued" or obligations "incurred" so as to attract the old law to them to support initiation or continuation of the proceedings against the land holde rs after the repeal. It was contended that even if the prov i sions of the old Act were held to have been saved it cou ld not be said that there was any right accrued in favour of the State or any liability incurred by the land holders in the matter of determination of the 'ceiling area ' so as to attract to their cases the provisions of the old law. T he point ' emphasised by the learned counsel is that the exces s land would vest in the State only after the completion of the proceedings and upon the land holder signifying h is choice as to the identify of the land to be surrendere d. Clauses (c) and (e) of Sec.6 of the Rajashtan Gener al Clauses Act, 1955, provide, respectively, that the repeal of an enactment shall not, unless a different intention a p pears, "affect any right privilege, obligation, or liabil i ty, acquired, accrued, or incurred under any enactment so repealed" or "affect any investigation legal proceeding or remedy in respect of any such right, privilege, obligatio n, liability, fine, penalty, forfeiture, or punishment as aforesaid. " For purposes of these clauses the "right" must be "accrued" and not merely an inchoate one. The distincti on between what is and what is not a right preserved by Secti on 6 of the , it is said, is often one of great fineness. What is unaffected by the repeal is a rig ht 'acquired ' or 'accrued ' under the repealed statute and n ot "a mere hope or expectation" of acquiring a right or liber ty to apply for a right. In Lalji Raja vs Firm Hansraj, ; th is Court dealing with the distinction between the "abstra ct rights" and "specific rights" for the purpose of the oper a tion of Sec. 6 of said: "That a provision to preserve the right accru ed under a repealed Act 'was not intended to preserve t he abstract rights conferred by the repealed Act . It only applied to specific rights given to an individual up on happening of one or the other of the events specified in statute ' See Lord Atkin 's observations in Hamilton Gell vs White, The mere right, existed at t he date of repealing statute, to take advantage of provisio ns of the statute repealed is not a 'right accrued ' within t he meaning 169 of the usual saving clause see Abbot vs Minister for Land s, and G. Ogden Industries pry. Ltd. vs Luca s, 15. To ascertain whether these were 'accrued ' rights and 'incurred ' liabilities a reference Section 30E of the r e pealed law is necessary. 30 E of 1955 Act provides: "30 E. Maximum land that can be held and restri c tion on future acquisitions: (1) Notwithstanding anything contained in this A ct or in any other law for the time being in force, no pers on shaH, as from a date notified by the State Government in this behalf: (a) Continue to hold or retain in his possessi on in any capacity and under any tenure whatsoever land in excess of the ceiling area applicable to him, or (b) acquire, by purchase, gift, mortgage, assig n ment, lease, surrender or otherwise or by devolution or bequest, any land so as to effect an increase in the exte nt of his holding over the ceiling area applicable to him; Provided that different dated may be so notifi ed for different areas of the State. (2) Every person, who, on such date, is in posse s sion of land in excess of the ceiling area applicable to him or who thereafter comes into possession of any land by acquisition under clause (b) of sub section (1), shal l, within six months of such date or within three months of acquisition, as the case may be, make a report of su ch possession or acquisition to, and shall surrender su ch excess land to the State Government and place it at t he disposal of the Tehsildar within the local limits of who se jurisdiction such land is situate. . . . (Omitted as unnecessary) 170 (3) Any person failing intentionally to make a report or to surrender land as required by sub section ( 2) shall, on conviction, be punishable with a fine which m ay extend to one thousand rupees. (4) Without prejudice and in addition to su ch conviction and fine the person retaining possession of a ny land in excess of the ceiling area applicable to him sha ll be deemed to be a trespasser liable to ejectment from su ch excess land and to pay penalty in accordance with clause ( a) of sub section (i) of section 183; Provided that the lands, from which a person sha ll be so ejected shaH, as for as may be, un encumbered lands. (5) All lands coming to the State Government by surrender under sub section (2) or by ejectment under su b section (4) shall vest in it free from all encumberances. . . (Omitted as unnecessary)" The rights and obligations under this provision had h ad to be determined with reference to the notified date i. e. 1.4.1966. Referring to analogous provision of the Maharas h tra Agricultural Lands (Ceiling on Holdings) Act, 1961, th is Court in Raghunath vs Maharashtra, ; at 57 observed: "The scheme of the Act seems to be to determine t he ceiling area of each person (including a family) with refe r ence to the appointed day. The policy of the Act appears to be that on and after the appointed day no person in t he State should be permitted to hold any land in excess of t he ceiling area as determined under the Act and that ceili ng area would be that which is determined as on the appoint ed day. " Again in Bhikoba Shankar Dhumal (dead) by LRs.& Ors.vs Mohan Lal Punchand Tathed & Ors., 18 at 228, it was observed: "A close reading of the aforesaid provisions of the Act shows that the determination of the extent of su r plus land of a holder has to be made as on the appointed day. If 171 any person has at any time after the fourth day of Augus t, 1959, but before the appointed day held any land (includi ng any exempted land) in excess of the ceiling area, su ch person should file a return within the prescribed peri od from the appointed day furnishing to each of the Collecto rs within whose jurisdiction any land in his holding is situa t ed, in the form prescribed containing the particulars of a ll land held by him. If any person acquires, holds or com es into possession of any land including any exempted land in excess of the ceiling area on or after the appointed da y, such person has to furnish a return as stated above with in the prescribed period from the date of taking possession of any land in excess of the ceiling area . . " A contention similar to the one urged for the appellan ts here that the title respecting the surplus land would ve st in the Government upon such land being taken possession of by Government after the declaration regarding the surpl us was noticed in that case. But, it was held that the liabil i ty to surrender the surplus land would date back to t he appointed day. This Court said: " .Any other construction would make t he Act unworkable and the determination of the extent of su r plus land of a holder ambulatory and indefinite . " This was again reiterated in State of Maharashtra vs Ann a purnabai and Ors., [1985] Supp.SCC 273 at 275. This Cou rt said: "Section 21 of the Act no doubt states that t he title of the holder of the surplus land would become vest ed in the State Government only on such land being taken po s session of after a declaration regarding the surplus land is published in Official Gazette. But the liability to surre n der the surplus land relates back to the appointed day in case of those who held land in excess of the ceiling on t he appointed day. Therefore, even if the holder dies befo re declaration of any part of his land as surplus land, t he surplus land is liable to be determined with reference to his holding on the appointed day . " It is, therefore, seen that the right of the Sta te to take over excess land vested in it as on the appoint ed day and only the quantification remained to be worked out. As observed by Lord Morris, in 172 Director of Public Works vs Ho Po Sang, [1961] 2 All.E. R. 721. "It may be, therefore, that under some repealed enactment, a right has been given, but that, in respect of it, so me investigation or legal proceeding is necessary. The right is then unaffected and preserved. It will be preserved even if a process of quantification is necessary. But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether so me right should be or should not be given. On a repeal t he former is preserved by the Interpretation Act. The latter is not. The above passage was referred to with approval in M. section Shivananda vs K.S.R.T. Corpn., ; at 81. 18. We agree with the High Court that the right of the State to the excess land was not merely an inchoate rig ht under the Act, but a right "accrued" within the meaning of sec.6 (c) of the Rajasthan General Clauses Act, 1955, a nd the liability of the land owner to surrender the excess la nd as on 1.4.1986 was a liability "incurred" also within t he meaning of the said provision. There is no substance in contention (b) either. These Appeals, Special Leave Petitions and t he WritPetition, accordingly, fail and are dismissed. In t he circumstances of the case, there will be no order as to costs. N.P.V. Appeals & Petitions dismissed.

Chapter III B of the Rajasthan Tenancy Act, 1955 pr e scribing a ceiling on holdings of agricultural lands, a nd cl.(6A) of section 5, defining 'ceiling area ' were introduc ed into the Act by the Rajasthan Tenancy (Amendment) Act, 196 0. The notified date under the 1955 Act was 153 1.4.1966. Subsequentiy, on 1.1.1973, by the Rajasthan Imp o sition of Ceiling on Agricultural Holdings Ordinance, 197 3, these provisions were repealed, except to the extent ind i cated in the second proviso to section 4(1) and section 15(2) of t he Ordinance. Certain transfers made by the landholders, ev en during the operation of the old law, were recognised as valid transfers for the purpose of computation of ceili ng area under the new dispensation brought about by the Ord i nance. The Ordinance was replaced by the 1973 Act wi th retrospective effect from 1.1.1973. Section 40 of the A ct repealed both the old law in Chapter III B of the 1955 A ct and the earlier Ordinance. After the 1973 Act came into force on 1.1.1973 cases f or determination of 'ceiling areas ' under Chapter III B of t he 1955 Act came to be initiated and were sought to be conti n ued under the repealed Chapter III B against the appellan ts including the appellants in C.A. No. 1003(N) of 1977 w ho claimed to have entered into possession and cultivation of certain parcels of land, pursuant to agreements to se ll dated 28.4.1957, said to have been executed, in their favo ur by the then land holder. The sale deeds in this case we re passed on 22.8.1966, after the notified date. Proceedin gs for the fixation of ceiling area in the hands of the th en land holder were commenced under the repealed Chapter II IB of the 1955 Act, and the purchases in question were held to be hit by section 3ODD of the repealed Chapter III B, as appe l lants did not possess the residential qualifications, pr e scribed by the section for the eligibility for recogniti on of such transfers. The appellants approached the High Court, contendi ng that after the coming into force of the 1973 Act which by section 40, repealed Chapter III B of the 1955 Act, recourse cou ld not be had to the repealed law for purposes of commencemen t, conduct and conclusion of any proceedings for fixation of ceiling as prescribed under the old law. Rejecting the contention of the appellants, the Hi gh Court held that the new Act of 1973 did not have the swee p ing effect of destroying all the rights accrued and liabil i ties incurred under the old Act. The correctness of the view of the High Court, w as challenged in the appeals before this Court. Some other wr it petitions were also filed directly in this Court. On the questions whether (a) the scheme contemplated by the 1973 Act and the different criteria and standards f or the determination of ceiling area envisaged in it and, in particular, having regard to the 154 limited scope of the saving provision of section 40 which, qui te significantly, omitted to invoke and attract section 6 of t he Rajasthan General Clauses Act 1955 to .he repeal of section 5(6 A) and Chapter III B of the '1955 Act ', must be construed a nd held to manifest an intention contrary ' to and inconsiste nt with the keeping alive or saving of the repealed law so as to be invoked in relation to and applied for the pendi ng cases which had not been concluded under the old law befo re the repeal; and (b) even if section 6 of the Rajasthan Gener al Clauses Act 1955 was attracted and the old law was saved f or the purpose, provisions of the old law could not be invok ed as no right had been "accrued" in favour of the State in relation to the surplus area determinable under the old l aw nor any liability incurred by the land holders under the o ld law so as to support the initiation of the proceedings f or fixation of ceiling area under the old law after its repea l. Dismissing the appeals, Special Leave Petitions and Wr it Petitions, this Court, HELD: 1.1 When there is a repeal of a statute accomp a nied by re enactment of a law on the same subject, t he provisions of the new enactment would have to be looked in to not for the purpose of ascertaining whether the consequenc es envisaged by section 6 of the General Clauses Act ensued or n ot but only for the purpose of determining whether the prov i sions in the new statute indicate a different intentio n. [164F G] State of Punjab vs Mohan Singh, referr ed to. 1.2 Mere absence of an express reference to section 6 of t he General Clauses Act is not conclusive, unless such omissi on is attended with the circumstance that the provisions of t he new law evince and make manifest and intention contrary to what would, otherwise, follow by the operation of the Se c tion, the incidents and consequences of section 6 would follo w. [163A B] B. Bansgopal vs Emperor, AIR 1933 All 669 referred to. 1.3 The scheme of the Rajasthan Imposition of Ceiling on Agricultural Holdings Act, 1973 does not manifest an inte n tion contrary to, and inconsistent with, the saving of t he repealed provisions of section 5(6A) and Chapter III B of t he Rajasthan Tenancy Act, 1955 so far as pending cases a re concerned, and the rights accrued and liabilities incurr ed under the old law are not effaced. The indicia that the o ld law was not effaced are in section 15(2) and section 40(1) read wi th second proviso to section 4(1) of the new Act. [167G; 165E] 155 1.4 The High Court was right in holding that the openi ng words of section 15(2) "without prejudice to any other reme dy that may be available to it under the Rajasthan Tenancy Ac t, 1955" clearly showed that the pending cases had to be go v erned by the old law, and if transactions past and clos ed had to be reopened and decided afresh under the provisio ns of the repealed law, and the ceiling area under Chapter I II of the 1955 Act had to be fixed under its repealed prov i sions, then it must follow, as a necessary corollary, th at the pending cases must be decided under the old law, a nd that the expression "law for the time being in force" d id not take within its sweep a law "deemed to be in force" an d, therefore, the opening words of section 3 of 1973 Act would n ot have an overriding effect so as to exclude the old la w. [167A D] Rao Shiv Bahadur Singh and Anr. vs The State of Vindh ya Pradesh; , and Chief Inspector of Mines vs K.C. Thapar; , referred to. A saving provision in a repealing statute is n ot exhaustive of the rights and obligations so saved or t he rights that survive the repeal. [167D E] 1. T. Commissioner U.P. vs Shah Sadiq and Sons, AIR 19 87 SC 1217 @ 1221 referred to. 3.1 For purpose of clauses (c) and (e) of the Rajasth an General Clauses Act, 1955, the "right" must be "accrued" a nd not merely an inchoate one. the distinction between what is and what is not a right preserved by section 6 of the Gener al 'Clauses Act is often one of great fineness. What is una f fected by the repeal is a right 'acquired ' or 'accrue d ' under the repealed statute and not "a mere hope or expect a tion" of acquiring a right or liberty to apply for a righ t. [168E] 3.2 The right of the State to the excess land was n ot merely an inchoate right under the Rajasthan Tenancy Ac t, 1955, but a right "accrued" within the meaning of section 6(c) of the Rajasthan General Clauses Act, 1955. [172D] The rights and obligations under section 30E of the 1955 A ct had had to be determined with reference to the notified da te i.e. 1.4.1966. The right of the State, to take over exce ss land, vested in It as on the appointed date, and only t he quantification remained to be worked out. The liability of the land owner to surrender the excess land as on 156 1.4.1966 was a liability "incurred" also within the meani ng of the said provision. [170E;171H; 172D] Lalji Raja vs Firm Hansraj, ; ; Raghuna th vs Maharashtra; , at 57; Bhikoba Shank ar Dhumal (dead) by LRs & Ors. vs Mohan Lal Punchand Tathed Ors. ; , at 228; State of Maharashtra vs Annapurnabai and Ors., [1985] Supp. SCC 273 at 275; Direct or of Public Works vs Ho Po Sany, ; a nd M.S. Shivananda vs K.S.R. Corpn., ; at 81 r e ferred to.

vil Appeal No. 291 of 1955. Appeal by special leave from the judgment and order dated March 29, 1955, of the Calcutta High Court in appeal from Appellate Order No. 134 of 1954, affirming the appeal against the judgment and order 361 dated July 29, 1954, of the Court of the District Judge of 24 Parganas in Misc. Appeal No. 87 of 1954, arising out of the order of the 1st Additional Court of the Munsif at Sealdah dated February 2, 1954, in Misc. Judicial Case No. 96 of 1953. N. C. Chatterjee and section N. Mukherjee, for the appellant. A. V. Viswanatha Sastri and D. N. Mukherjee, for the respondent. 1957 September 10. The following Judgment of the Court was delivered by GAJENDRAGADKAR J. This is an appeal by special leave in execution proceedings and the short point which the appellant has raised before us is that, under section 5 (1) of the Calcutta Thika Tenancy Act, 1949 (West Bengal II of 1949) as amended by the Calcutta Thika Tenancy (Amendment) Act, 1953 (West Bengal VI of 1953), execution proceedings taken out by the decrees against him could be entertained only by the controller and not by the civil courts. This point arises in this way. The appellant is a thika tenant in respect of a portion of the premises No. 28, R. G. Kar Road in Calcutta. In Suit No. 46 of 1948 a decree for ejectment was passed against him and in favour of the respondent on March 16, 1949. This decree was challenged by the appellant by preferring an appeal before the District Court and a second appeal before the High Court at Calcutta; but both those appeals failed and the decree for ejectment passed by the trial court was confirmed. Then followed several proceedings between the parties and the course of litigation between them turned out to be protracted and tortuous. Ultimately on May 22, 1953, the respondent filed an execution case before the First Additional Court, Sealdah (Title Execution Case No. 34 of 1953). By this application the respondent claimed that the possession of the property covered by the decree should be delivered to him. Thereupon the appellant filed a Miscellaneous Judicial Case under section 47 of the Code of Civil Procedure in the court raising several objections to the decree holder 's claim for execution (Miscellaneous 362 Judicial Case No. 96 of 1953). This case was dismissed by the executing court on February 2, 1954. A miscellaneous appeal preferred by the appellant before the learned District Judge, 24 Parganas, as well as the second miscellaneous appeal preferred by him before the High Court at Calcutta were likewise dismissed. The appellant then applied for leave to prefer an appeal under the Letters Patent. This application was rejected by Mr. Justice Renupada Mukherjee who had heard the second appeal. On May 10, 1955, the appellant filed a petition for special leave to appeal to this Court and special leave was granted to him on May 18, 1955. The courts below have held that the decree holder 's application for execution of the decree passed in his favour can and ought to be entertained by the civil courts and an order has been passed against the appellant that he should vacate the premises in question before the end of Jaistha 1362 B.S. (1 5th June, 1955), failing which execution will proceed according to law. The appellant 's contention is that the view taken by the courts below about the competence of the civil courts to entertain the decree holder 's execution application proceeds on a misconstruction of section 5 (1) of the Calcutta Thika Tenancy Act. That is how the only question which arises for our decision is about the construction of the said relevant section. Before dealing with this point, it would be useful to consider briefly the history of legislation passed by the West Bengal Legislature with the object of affording protection to the thika tenants. Until 1948 the rights and liabilities of the landlords and their thika tenants were governed by the provisions of the Transfer of Property Act. On October 26, 1948, the Calcutta Thika Tenancy Ordinance XI of 1948, was promulgated because it was thought expedient, pending the enactment of appropriate legislation to provide for the temporary stay of the execution of certain decrees and orders of ejectment of thika tenants in Calcutta. Section 2 of the Ordinance defined the thika tenant. Section 3 provided that no decree or order for the ejectment of a thika tenant shall be executed during the continuance in operation of the Ordinance, From the 363 operation of this section were excluded decrees or orders for ejectment passed against, thika tenants on the ground of non payment of rent unless the tenants deposited in court the amount of the decree or order as required by the proviso. The object of the Ordinance clearly appears to be to give protection to the thika tenants in Calcutta and to afford them interim ' relief by staying execution of certain decrees and orders as mentioned in section 3 until an appropriate Act was passed by the Legislature in that behalf. Then followed Act II of 1949 on February 28, 1949. Section 2, sub section (5) of this Act defines a thika tenant. Section 3 lays down the grounds on which a thika tenant may be ejected. The effect of this section is that it is only where one or more of the six grounds recognized by section 3 is proved against a thika tenant that a decree for ejectment against him can be passed. In other words, grounds other than those mentioned in section 3 on which a landlord would have been entitled to eject his thika tenant under the provisions of the Transfer of Property Act became inapplicable to the case of the thika tenants by virtue of section 3. Section 5, sub section (1) reads thus: "section 5. (1) Notwithstanding anything contained in any other law for the time being in force, a landlord wishing to eject a thika tenant on one or more of the grounds specified in section 3 shall apply in the prescribed manner to the Controller for an order in that behalf and, on receipt of such application, the Controller shall, after giving the thika tenant a notice to show cause within thirty days from the date of service of the notice why the application shall not be allowed and after making an inquiry in the prescribed manner either allow the application or reject it after recording the reasons for making such order, and, if he allows the application, shall make an order directing the thika tenant to vacate the holding and, subject to the provisions of section 10, to put the landlord in possession thereof." This section requires the landlord wishing to eject his thika tenant on one or more of the grounds specified in section 3 to apply in the prescribed manner to the Controller 47 364 for an order in that behalf. This section further provides for the procedure to be followed by the Controller in dealing with such an application. Two other sections of this Act need to be considered. Section 28 deals with cases where decrees or orders for the recovery of possession of any holding from a thika tenant have been passed before the date of the commencement of the Act and it lays down that if possession has not been obtained by the decree holder in execution of such decrees or orders the court may consider whether the decree or order in question is or is not in conformity with any of the provisions of the Act other than subs. (1) of section 5 or section 27. On considering this matter jurisdiction is given to the court to rescind or vary the decree or the order for the purpose of giving effect to the relevant provisions of this Act. A decree or order so varied has then to be sent to the Controller for execution as if it were an order made under and in accordance with the provisions of the Act. Having thus dealt with decrees and orders for ejectment passed against thika tenants prior to the commencement of this Act, section 29 proceeds to deal with pending, proceedings for ejectment between the landlords and the thika tenants. This section lays down that all pending proceedings of this character shall be transferred to the Controller who shall thereupon deal with them in accordance with the provisions of this Act as if this Act had been in operation on the date of the institution of the suit or proceeding. The proviso to this section exempts the application of section 4 of this Act to such proceedings for obvious reasons. It appears that the definition of the expression thika tenant " contained in the Act gave rise to some difficulties and it was discovered that some of the tenants in Calcutta who were in substance thika tenants failed to obtain the protection of the Act owing to some words used in the said definition. In order to afford protection to the whole class of thika tenants in Calcutta, West Bengal Ordinance No. XV of 1952 was promulgated on October 21, 1952. Accordingly, section 2 of this Ordinance amended section 2, sub section (5) of the Calcutta Thika Tenancy Act II of 1949. This is one important 365 change introduced by this Ordinance. The other important change introduced by this Ordinance is to be found in section 5 of the Ordinance. Section 5, sub section (1) lays down that all cases pending before a court or Controller on the date of the commencement of this Ordinance shall be governed by the provisions of Act II of 1949, as amended by this Ordinance. Sub section (2) of section 5 then deals with cases where decrees or orders have been passed for the recovery of possession at any time between the commencement of the said Act and this Ordinance. In the present appeal, we are dealing with a decree falling under section 5, sub section (2) of this Ordinance. In respect of such decrees this sub section lays down that the judgment debtor could apply within three months of the commencement of the Ordinance to the court or the Controller as the case may be and invite his decision on the question of his status as thika tenant; according to the provisions of this subsection, the status of the judgment debtor as a thika tenant would then have to be determined under the amended definition of the expression "thika tenant". If the finding on the question of status is in favour of the judgment debtor then the decree or order would have to be set aside and execution proceedings annulled, and the matter sent back to the court or Controller for disposal in accordance with law. Subsection (3) of section 5 enables the court or the Controller to stay proceedings, if any, in execution pending the disposal of an application made under sub section In other words, the effect of sub section (2) of section 5 clearly appears to be that, in regard to decrees passed during the period mentioned by this subsection, a judgment debt or was given a right to challenge the validity of the said decree or order on the ground that he was a thika tenant under the amended definition of the said expression and this right could be exercised by making an appropriate application within the prescribed period of three months. If no such application is made by the judgment debtor within the prescribed period, then the decree or order for ejectment passed against him would be executed under the ordinary law. 366 This Ordinance was followed by the Calcutta Thika Tenancy (Amendment) Act, 1953 (West Bengal VI of 1953). This Act came into force immediately on the Calcutta Thika Tenancy (Amendment) Ordinance, 1952 (West Bengal Ordinance No. XV of 1952), ceasing to operate. Under the proviso to section 1, sub section (2) of this Act, the provisions of the Calcutta Thika Tenancy Act II of 1949, as amended by this Act, shall also apply and be deemed to always apply to all suits, appeals and proceedings pending before any court or before the Controller or before a person deciding an appeal under section 27 of this Act on the date of the commencement of the said Ordinance of 1952. It must, however, be added that this proviso was subject to the provisions of section 9 of this Act. We will presently refer to section 9. Section 2 of this Act adopted the amendment of the definition of the expression, " thika tenancy" introduced by the amending Ordinance of 1952. Section 4 of this amending Act has amended a. 5, sub section (1) of the original Act by deleting the words "but subject to the provisions of section 28" which occurred in the said section. By s.8 of this Act, sections 28 and 29 in the original Act II of 1949 have been omitted and by a. 9 it is laid down that any proceedings commenced under sub section (2) of section 5 of the amending Ordinance of 1952 shall, on the said Ordinance ceasing to operate be continued as if sub sections (2), (3) and (4) of that section and the explanations to that section were in force. It would thus appear that though the Ordinance ceased to be operative the remedy provided by section 5, sub section (2) of the Ordinance to judgment debtors continued to be available to them and the applications made by them to seek. the protection of the said provision bad to be dealt with as if the material provisions of the Ordinance were in operation. It is true that section 9 of the amending Act has not been incorporated in the original Act II of 1949 but it is conceded that the omission to include this section in the original Act does not make any difference. Mr. N. C. Chatterjee, for the appellant, has contended that the object in enacting the relevant 367 Thika Tenancy Acts and Ordinances is absolutely clear. It is a piece of welfare legislation and as such its operative provisions should receive a beneficient construction from the courts. If the scheme of the Act and the object underlying it is to afford full protection to the thika tenants, says Mr. Chatterjee, courts should be slow to reach the conclusion that any class of thika tenants are excluded from the benefit of the said Act. In support of his argument Mr. Chatterjee hasnaturally relied on the observations made by Barons of the Exchequer in Heydon 's case (1).Indeed these observations have been so frequently cited with approval by courts administering provisions of welfare enactments that they have now attained the status of a classic on the subject and their validity cannot be challenged. However, in applying these observations to the provisions of any statute, it must always be borne in mind that the first and primary rule of construction is that the intention of the Legislature must be found in the words used by the Legislature itself. If the words used are capable of one construction only then it would not be open to the courts to adopt any other hypothetical construction on the ground that such hypothetical construction is more consistent with the alleged object and policy of the Act. The words used in the material provisions of the statute must be interpreted in their plain grammatical meaning and it is only when such words are capable of two constructions that the question of giving effect to the policy or object of the Act can legitimately arise. When the material words are capable of two constructions, one of which is likely to defeat or impair the policy of the Act whilst the other construction is likely to assist the achievement of the said policy, then the courts would prefer to adopt the latter construction. It is only in such cases that it becomes relevant to consider the mischief and defect which the, Act purports to remedy and correct. Indeed Mr. Chatterjee himself fairly conceded that be would not be justified in asking the court to put an undue strain on the words used in the section in order (1) (1584) 3 Co. Rep. 8. 368 that a construction favourable to the thika tenants should be deduced. It is in the light of this legal position that we must now consider section 5, sub section (1) of West Bengal Act II of 1949, amended by West Bengal Act VI of 1953. Under the provisions of sections 5 and 28 of the original West Bengal Act II of 1949, the position was clear. If a landlord wished to eject his tenant he could have obtained an order for ejectment only if his claim was justified on one or more of the grounds recognized by section 3 of the Act. If, after the commencement of the Act, the landlord wanted to enforce his claim for ejectment, he had to apply for the said relief before the Controller under section 5 in the prescribed manner. The application of section 5, sub section (1) was, however, subject to the provisions of section 28. As we have already pointed out, section 28 dealt with decrees or orders already passed whereas section 29 dealt with suits and proceedings pending at the commencement of the Act. The appellant 's contention is that the effect of sections 5, 28 and 29 was to submit the claims of landlords for ejectment of the thika tenants to a scrutiny in the light of the provisions of section 3 and other relevant sections of the Act. Whether the claim had merged in a decree or was pending in a proceeding at the time when the Act came into force or it was made after the commencement of the Act, in every case the test laid down by section 3 had to be applied; and the argument is that/ this position is not altered by the amendments made by Act VI of 1953. In our opinion, this argument cannot be accepted. Section 3 clearly refers to the claim for ejectment made by the landlord in a proceeding instituted by him. It is difficult to understand how section 3 could be invoked against a landlord who has obtained a decree for ejectment of his thika tenant. It is quite plain that when a decree holder seeks to obtain possession of his property in execution of a decree he cannot be said to obtain such possession on any of the grounds mentioned in section 3. All that he does is to rely upon the decree passed by a court of competent jurisdiction and to insist upon its execution. Similarly the proceedings contemplated by section 5, sub section (1), cannot in 369 our opinion, be said to include execution proceedings of this type. Section 5, sub section (1) deals with cases where the landlord initiates original proceedings for ejecting his thika tenant. This sub section refers to a landlord wishing to eject a thika tenant on one or more of the grounds specified in section 3. Now this description is wholly inapplicable to a landlord who holds ' a decree for ejectment in his favour. That is why we feel no hesitation in coming to the conclusion that landlords who have obtained decrees of ejectment against their thika tenants cannot be required to apply under the provisions of section 5, sub section (1) of the Act. That is one aspect of the matter. The other provisions of the said sub section also point to the same conclusion. When an application for ejectment is made under section 5, sub section (1), notice is ordered to be issued to the thika tenant and enquiry follows in the light of the pro visions of section 3. It is only if the Controller is satisfied that one or more of the grounds recognized by section 3 is proved by the landlord that an order for ejectment would be passed by him and this order would be followed by a direction in consequence of which the landlord would be put in possession of the premises. Section 5, sub section (1) thus provides for a self contained procedure for dealing with applications for ejectment made by a landlord against his thika tenant before the Controller. Mr. Chatterjee, however, suggests that the deletion of the words " subject to the provisions of section 28 " which originally occurred in section 5 indicates that the Controller has been given jurisdiction not only to entertain original applications for ejectment made by the landlords but also to deal with decrees already passed in their favour. Whether or not the use of the deleted words in the original section 5 (1) served any useful purpose and what exactly was their denotation are matters on which it is unnecessary to pronounce a judgment in the present case. It is clear that since section 28 along with section 29 has been deleted from the Act by the subsequent amending Act VI of 1953, any reference to section 28 in section 5 (1) would have been entirely out of place. But the deletion of the material words does not enlarge the 370 jurisdiction of the Controller to reopen disputes between the landlords and their thika tenants when in respect of such disputes decrees have already been passed by courts of competent jurisdiction in favour of landlords. All the relevant provisions of section 5, sub section (1) are absolutely inapplicable to cases of such decrees and so we are unable to accept the argument that even where a decree has been passed in favour of the landlord a claim for the execution of the decree would have to be entertained and considered by the Controller under section 5, sub section Then it is urged that it would be unreasonable to hold that a certain class of thika tenants was precluded from obtaining the benefit of the Act merely because decrees for ejectment were passed before the Act came into force; and it is emphasised that the scheme of the original Act as evidenced by sections 5, 28 and 29 clearly was to afford protection to all thika tenants even where decrees for ejectment had been passed against them. It must be conceded that under the original Act, section 28 purported to give protection to judgmentdebtors ' and required that the decrees passed against thika tenants should be examined by the courts that passed the decrees in the light of the provisions of the Thika Tenancy Act. But, later on, it appears to have been thought prudent to limit the protection to such judgment debtors in the manner contemplated by section 5, sub section (2) of the amending Ordinance of 1952. Such judgment debtors were allowed liberty to apply for setting aside the decrees passed against them within three months after the commencement of the said Ordinance and such applications were required to be dealt with according to law even after the Ordinance ceased to be operative. As we have already pointed out, the decree with which we are concerned in the present appeal falls within the purview of the provision of section 5, sub section (2) of the Ordinance. If the judgment. debtor did not avail himself of the right conferred on him by this provision, he cannot now seek to rectify the omission by relying on the provisions of section 5, sub section (1) as amended. It may be unfortunate that owing to the steps that he was taking in several 371 proceedings adopted by him in the present litigation he was probably not advised to make a proper application under section 5, sub section (2) of the Ordinance; but that is the only protection that he and judgment debtors of his class were entitled to after the amending Ordinance of 1952 came into force. It would, therefore, not be reasonable to complain that no protection whatever has been given to this class of thika tenants. It may be that the extent of the protection now afforded to this class may not be as wide as it originally was under section 28 of Act II of 1949 but the deletion of section 28 clearly indicates that the Legislature wanted to revise its policy in this matter. The position, therefore, is that the conclusion which follows from a reasonable construction of section 5, sub section (1) is corroborated by the deletion of section 28 from the Act and by the provision of section 5, sub section (2) of the amending Ordinance of 1952 and section 9 of the amending Act VI of 1953. We must,accordingly, hold that the Calcutta High Court was right in rejecting the appellant 's argument that civil courts had no jurisdiction to entertain the execution petition filed by the respondent against the appellant. In the result, the appeal fails and must be dismissed with costs. Appeal dismissed.

Respondent obtained a decree for ejectment against the appellant, a thika tenant, and filed an application for execution of the decree before the civil Court. Appellant resisted the application on the ground that in view Of section 5(1) Of the Calcutta Thika Tenancy Act, 1949, the civil Court had no jurisdiction to entertain the application. Section 5(1) provides that a landlord wishing to eject a thika tenant on the grounds specified in section 3 shall apply to the Controller in that behalf. Held that section 5(1) did not apply to a case where the landlord had already obtained a decree for ejectment against his thika tenant and consequently the civil Court had jurisdiction to entertain the execution application. The operative provisions of welfare legislation should receive a beneficent construction from the Courts. But the words used in a statute must be interpreted in their plain grammatical meaning and it is only when such words are capable of two constructions that the question of adopting the construction which is more consistent with the policy of the Act arises. Heydon 's Case, (1584) 3 Co. Rep. 8, referred to.

N: Civil Appeal Nos. 5969 70 (NM) of 1990. From the Order dated 21.8.1990 of the Customs, Excise and Gold (Control), Appellate Tribunal, New Delhi in Appeal Nos. ED/SB/T/945/80 A and ED/SB/T/A. No. 586/81 A (Order No. 1284 to 1286/90 A.). Dr. Debi Paul, Harish Salve, Darshan Singh, Ms. Suman J. Khaitan and Ms. Priya Hingorani for the appellant. A. Subba Rao for the Respondent. The following Order of the Court was delivered: These appeals arise out of and directed against the common appellate order dated 21.8.1990 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi ( 'Tribunal ' for short) m ' Appeals Nos. ED/SB/T 945/80A and ED/SB/T/586/8 1A. By the same order another appeal of the appellant was also disposed of but that matter is not car ried up in appeal here. The appellant, M/s. Texmaco Ltd., pursuant to con tracts entered into in this behalf with the Railway Adminis tration fabricated and delivered to the Railways wagon bodies mounted on "wheel sets" supplied by the Railways. The invoices raised by the appellant respecting these wagons reflected only the price of the wagon bodies without includ ing the value of the "wheel sets" on which the wagon bodies were mounted. The goods were cleared for purposes of Excise duties on such invoice value. The Revenue raised demand for recovery of short levy and sought to recover the unpaid duty on the value of the "wheel sets" also. This claim for recov ery of the short levy having been adjudicated against the appellant, an appeal was taken before the Tribunal. Before the Tribunal, it would appear, two contentions were raised: First that the goods manufactured by the appel lant were only the wagon bodies mounted on the "wheel sets" supplied by the Railway Administration and that, therefore, the assessable value could only be the value of the wagon bodies excluding the "wheel sets" 326 supplied by the Railways and, secondly, that at all events the value in excess of the 'invoice value ' which represented the price of the wagonbodies was exempt from levy of duty under the Exemption Notification No. 120/75 CE dated 30 April, 1975 issued under Rule 8 of the Central Excise Rules, 1944. What is implicit in the second contention is that, but for the said Notification No. 120/75 CE dated 30.4.1975, the assessable value would otherwise require the exclusion in it the value of the "wheel sets" also on the premise that the "wheel sets" became an integral part of the wagons, even though the "wheel sets" had been supplied free of cost by the Railways themselves. The Notification No. 120/75 CE exempted "so much of the duty of excise . . as is in excess of the duty calculated on the basis of invoice prices". On the first contention: that the 'assessable value ' of the 'goods ' could not include the "wheel sets" which were not fabricated or manufactured by the appellant, the Tribu nal, rejecting the contention said: "On going through the facts and in view of the clear findings given by the lower authorities that no wagon is complete without the wheels; what has been cleared and removed by the appellants is the wagon mounted on wheel sets and not the wagon body alone . On the issue of determination of assessable value, the Supreme Court has held that for the purpose of levy of excise duty, the value of the article is the full intrinsic value of the article inclusive of the cost of the materials and components supplied free by the customer and irrespective of the fact that no expenditure was incurred by the manufactur er on such components." No fault can be found with this reasoning of the Tribunal, indeed, considerations of ownership of the goods are extra neous to levy of duties of excise which are imposts on manufacture. The second contention on which Dr. Pal laid particu lar emphasis, indeed, assumes the correctness of the first proposition and claims exemption on the strength of the Notification No. 120/75 CE. That Notification says: "The Central Government has exempted goods falling 327 under Item No. 68 of the First Schedule to the (1 of 1944), cleared from the factory of manufac ture, on sale, from so much of the duty of excise leviable thereon as is in excess of the duty calculated on the basis of the invoice price (excluding duty and local taxes, if any, included in such price) charged by the manu facturer for the sale of such goods: Provided that the aforesaid exemp tion shall be admissible only if (i) the manufacturer files with the Superin tendent of Central Excise having jurisdiction a written declaration to the effect that he opts to avail of the said exemption: (ii) Omitted as unnecessary (iii) (iv) the invoice price is not influenced by any commercial, financial or other relation ship whether by contract or otherwise between the manufacturer or any person associated in business with the manufacturer and the buyer other than the relationship created by sale of the aforesaid goods: (v) Omitted as unnecessary. Provided . (Omitted as unnecessary) The Tribunal also rejected the claims for exemption under the Notification. It said: "We are unable to agree with the arguments of the appellants ' counsel that assessable value of the article is different from the consideration received by the appel lants to claim benefit under Notification 120/75. To claim exemption on benefit under Notification 120/75 it should be subjected to in compliance with the conditions specified therein. Condition No. IV of Notification No. 120/75 required that the invoice value should be 328 the full commercial price of the article. According to the decision of the Supreme Court (supra) the value of the article is the in trinsic value and not restricted consideration received by the appellant as urged by the appellants ' counsel. In the view we have taken, the appellants are not entitled to concession under Notification No. 120/75 dated 30.4. 1975 . Dr. Pal appearing in support of the appeals urged that the Tribunal misdirected itself in law in its construc tion of the exemption Notification and in its reasoning that there was something in Clause (iv) of the Notification which detracted from the permissibility of its benefit in the present case. Dr. Pal said that it was erroneous to read the said condition as requiring the 'invoice value ' to be the full commercial price of the goods including therein the value of the "wheelsets". Dr. Pal said that clause (iv) did no more than merely importing the requirement that the invoice price should reflect a transaction at arms ' length and not that appellant 's invoice price should also include the value of the "wheel sets" supplied by the Railways. Dr. Pal further urged that the very purpose of the exemption was to relieve the manufacturer from bearing the burden of the duty on such part of the assessable value as did not reflect the value of his supply and services but represented the value of the "wheel sets" supplied by the Railway Adminis tration itself free of charge. If Clause (iv) was construed in the way in which the Tribunal did, the effect, counsel said, would be to take away with one hand what the notifica tion gave with the other. Shri Subba Rao, learned counsel for the Revenue, with his usual tenacity contended that Clause (iv) of the Notifi cation signified and imported idea of full value of the manufactured goods being required to be reflected in the invoice and that the reasoning of, and the conclusion reached by, the Tribunal was correct. On a consideration of the matter we are afraid the Tribu nal fell in to an error in its understanding of the notifi cation. The Notification posits and predicates the possibil ity that the 'invoice value ' could be lesser than the "assessable value" and, taking into account the need to mitigate the hardship on the manufacturer of being called upon to pay ' duty on the value in excess of the invoice value, seeks to exempt the manufacturer from payment of duty "in excess of the duty calculated on the basis of the 'i nvoice price '. There is no dipute in this case that the invoice price represented the value of the wagons, less the value of the "wheel sets" supplied by the Railways. The invoice price 329 could not be required to include the value of the "wheel sets". But the "assessable value" would take into account the full commercial value including that of the "wheel sets". It is in order to mitigate the hardship that may arise by requiring the manufacturer to pay duty on this difference in such cases that the Notification No. 120/75 came to be promulgated. There is nothing in Clause (iv) which enjoins upon the appellant to include the value of the "wheel sets". The contract between the parties does not also require this. The way in which the Tribunal looked at the Notification is neither good sense nor good law. Such con struction would make the Notification and the exemption contemplated thereunder meaningless. The need for the exemp tion arose in view of the fact that "assessable value" was higher than the 'invoice value '. Requiring the former and the latter to be the same as something compelled by Clause (iv) is really to construe the Notification against itself. Shri Subba Rao placed strong reliance on the pro nouncement of this Court in M/s. Burn Standard Company Ltd. & Anr. vs Union of India & Ors., [1991] 3 Judgments Today 108. On the contentions raised and argued in that case the judgment, if we may say so with great respect, is correct. The question of the effect of the exemption Notification No. 120/7.5 CE was not raised and argued in that case. That apart, the exemption Notification itself makes it clear that it does not apply or is attracted to every case automatical ly, but that the manufacturer should expressly opt for the benefit of the Notification. Since no such claim was made in that case, the decision therein is of no assistance to the revenue. We accordingly allow these appeals; set aside the order of the authorities as well the affirming order of the Tribunal under appeal and hold that the appellant was enti tled under the said Notification No 120/75/CE, to exemption from that part of the duty as was in excess of the invoice price which, we hold, was not required to include the value of the "wheel sets". V.P.R. Appeals allowed.

The appellant pursuant to contracts entered into with the Railway Administration fabricated and delivered to the Railways wagon bodies mounted on "wheel sets" supplied by the Railways. The appellant 's invoices, reflected only the price of the wagonbodies without including the value of the "wheel sets" on which the wagon bodies were mounted. The goods were cleared for purposes of Excise duties on such invoice value. The Revenue raised demand for recovery of short levy and sought to recover the unpaid duty on the value of the "wheel sets" also. The claim for recovery of the short levy having been adjudicated against the appellant, appeals were filed before the Tribunal, by the appellant contending that the goods manufactured by the appellant were only the wagon bodies mounted on the "wheel sets" supplied by the Railway Adminis tration; and therefore, the assessable value could only be the value of the wagon bodies excluding the "wheel sets" supplied by the Railways; and that at all events the value in excess of the 'invoice value ' which represented the price of the wagon bodies was exempt from levy of duty under the Exemption Notification No. 120/75CE dated 30th April, 1975 issued under Rule 8 of the Central Excise Rules, 1944. The Tribunal dismissed the appeals, against which, the present appeals were filed before this Court. The appellant contended that the Tribunal misdirected itself in law in its construction of the exemption Notifica tion and in its reasoning that there was something in Clause (iv) of the Notification which detracted from the permissi bility of its benefit in the present case; that 324 it was erroneous to read the condition as requiring the 'invoice value ' to be the full commercial price of the goods including therein the value of the "wheel sets"; that the very purpose of the exemption was to relieve the manufactur er from bearing the burden of the duty on such part of the assessable value as did not reflect the value of his supply and services but represented the value of the "wheel sets" supplied by the Railway Administration itself free of charge. The Revenue Respondent contended that Clause (iv) of the Notification signified and imported the idea of full value of the manufactured goods being required to be reflected in the invoice and that the reasoning of, and the conclusion reached by, the Tribunal was correct. This Court allowing the appeals, HELD. 1. The Notification posits and predicates the possibility that the invoice value ' could be lesser than the "assessable value" and, taking into account the need to mitigate the hardship on the manufacturer of being called upon to pay duty on the value in excess of the invoice value, seeks to exempt the manufacturer from payment of duty "inexcess of the duty" calculated on the basis of the 'i nvoiceprice '. [328G H] 2. The way in which the Tribunal looked at the Notifica tion is neither good sense nor good law. Such construction would make the Notification and the exemption contemplated thereunder meaningless. The need for the exemption arose in view of the fact that "assessablevalue" was higher than the 'invoice value '. Requiring the former and the latter to be the same as something compelled by Clause (iv) is really to construe the Notification against itself. [329B C] 3. In this case, there is no dispute that the invoice price represented the value of the wagons, less the value of the "wheel sets" supplied by the Railways. The invoice price could not be required to include the value of the "wheel sets". But the "assessable value" would take into account the full commercial value including that of the "wheel sets". 1t is in order to mitigate the hardship that may arise by requiring the manufacturer to pay duty on this difference in such cases that the Notification No. 120/75 came to be promulgated. [328H 329B] 4. There is nothing in Clause (iv) which enjoins upon the appellant to include the value of the "wheel sets". The contract between the parties does not also require this. [329B] 325 M/s. Burn Standard Company Ltd. & Anr. vs Union of India

Petition Nos. 1488 89, 1556 57, 1571/79 and 29, 201, 222, 249, 260 263, 267, 268 271, 278, 279, 304, 305, 309, 310 and 326 of 1980. (Under Article 32 of the Constitution) 1257 Anil Dev Singh, S.S. Jauhar and Lalit Kumar Gupta for the Petitioners in WP Nos. 1488 89, 1571/79 and 304, 309 310/80. Anil Dev Singh and S.K. Sabharwal for the Petitioners in WP Nos. 201, 249, 267, 278, 279 and 326/80. Naunit Lal for the Petitioners in WP Nos. 1556 57/79, 29, 222, 260 63, 268 271 and 305/80. S.N. Kackar for the Respondent in WP Nos. 1488 1489/79. Y.S. Chitale and Mukul Mudgal for the Respondent in WP Nos. 1556 1557/79. Altaf Ahmed for Respondent Nos. 1 3 in WP 1488 and RR. 1 6 in WP 1489/79 and in all the matters. ATM Sampath and P.N. Ramalingam for RR. 7 in WP No. 1488/79 and 1551 1557/79. C.S.S. Rao for RR. 12 in WP No. 1488/79. S.P. Gupta, V.K. Pandita, R. Satish and E.C. Agarwala and Dwarka Nath Gupta for the Intervener in WP Nos. 1556 1557/79. A.K. Sen, V.K. Pandey, R. Satish, S.P. Gupta, Dwarka Nath Gupta and E.C. Agarwala for the Intervener in WP Nos. 1488 1489/79. L.M. Singhvi (Dr.), L.K. Pandey and Mr. Naunit Lal for the Petitioner in WP No. 29/80. The Judgment, of the Court was delivered by GUPTA, J. The selection of candidates admitted to the Government Medical College, Jammu, for the academic year 1979 80 is challenged in these petitions under Article 32 of the Constitution by some of the candidates who were not selected. By notification published in the Jammu and Kashmir Government Gazette on June 21, 1979 applications were invited for admission to the M.B.B.S. course in the aforesaid college. Only those candidates who had passed the Pre Medical or Inter Science or First Year T.D.C. (Medical Group) examination from the University of Jammu or any other equivalent examination and had secured not less than 50 per cent marks in science subjects in aggregate (theory and practical) were eligible to apply for admission; however, for scheduled castes, scheduled tribes, Bakarwal and Gujjar candidates and candidates from Ladakh district and 'Bad Pockets ' the qualifying marks was 45 per cent. Candidates who had been selected or nominated by the Government of Jammu and Kashmir or had been already selected by a selection committee constituted by the Government for any training course in or outside the State were not eligible to apply or to appear for interview for admission to this college. The notification 1258 added: "Comparative merit of the candidates will be adjudged with respect to physical fitness, aptitude, personality, general knowledge and general intelligence in the interview, for which marks will be awarded according to the performance of the candidates". It was further provided that the selection would be made in accordance with the manner and procedure laid down in the various orders issued by the Government from time to time. The total number of seats filled by selection in this college for the year 1979 80 was 52. The candidates numbered 526, out of which 473 actually appeared for interview. In addition 10 seats were filled by candidates nominated by the Government. It appears from the supplementary affidavit filed on behalf of the State of Jammu and Kashmir that the nominations had to be made only from two sources: wards of non resident Defence personnel, and students from other States. Before we proceed to consider the grounds on which the selection is challenged, it will be necessary to refer to the contents of the orders issued by the Government of Jammu and Kashmir to regulate the selection. The earliest order which is relevant in this context was made on July 9, 1973. This concerns admission to technical institutions which include medical colleges. The order starts by saying that "the man power requirements of various parts of the State have not received uniform and equal treatment with the result that there has been imbalance in the development of human resources in these parts", and "since the admissions to technical institutions also lead to the development of human resources", it had therefore "become necessary to provide equal opportunities to the permanent resident candidates of all parts of the State and all sections of society". The order then lays down the following rules for admission until further orders, it is said, with the aforesaid object in view: (1) 50 per cent of the seats "should be straightaway earmarked for being filled upon the basis of open merit in accordance with the criteria to be adopted by the concerned selection committee constituted by the Government in this behalf". (2) Of the remaining seats, 25 per cent is reserved for candidates falling under the categories specified below to the extent indicated against each, to be filled on the basis of merit in each category: (a) Scheduled castes 8% (b) Children of freedom fighters 7% (c) Children of permanent resident Defence personnel 3% 1259 (d) Candidates belonging to the following socially and educationally backward classes as recommended by the Backward Classes Committee; (i) Areas adjoining actual line of control 3% (ii) Areas known as bad pockets including Ladakh. 3% (iii) Social castes 1% It is further provided in the order that after selection as indicated in clauses (1) and (2) above had been made, the remaining 25 per cent of the seats "should be filled on the basis of inter se merit to ensure rectification of imbalance in the admissions for various parts of the State, if any, so as to give equitable and uniform treatment to those parts". It is added that in case there is no "visible imbalance" or where no candidates are available under a particular category mentioned in clause 2 above the seats earmarked under these two heads "shall be added to the percentage under 1 above". The selection committee while making selections is required by the order to indicate separately the category under which a candidate falls. There is an annexure to the order containing instructions concerning the "identifications of the persons claiming benefit" under clause 2 of the order and the "procedure connected therewith". The instructions define the different categories mentioned in clause (2). For the present purpose it will be necessary to refer to the definitions of "Areas adjoining actual line of control", "Bad pockets", and "Social castes". "Areas adjoining actual line of control Candidates permanently residing in any village of the State specified in Appendix I to these instructions." "Bad pockets candidates permanently residing in any village of the State specified in Appendix II to these instructions." "Social castes candidates of the State belonging to any of the castes indicated in Appendix III to these instructions. " The instructions also provide for the issue of a certificate by the concerned authority stating that a candidate falls under any of the categories. 1260 On June 27, 1974 another order was issued refixing the percentage of seats reserved for the different categories "with a view to affording more accommodation for open merit". The following changes were made to the earlier order: (1) Instead of 50 per cent, 60 per cent of the seats is now earmarked for admission on the basis of "open merit". (2) Instead of 25 per cent, 20 per cent is earmarked for admission under the categories mentioned in clause 2 of the order dated July 9, 1973. The percentage of seats allotted for children of freedom fighters is reduced from 7 per cent to 2 per cent. Under the category "socially and educationally backward classes" the earlier order had reserved 3 per cent of the seats for candidates belonging to areas known as bad pockets including Ladakh, by this order Ladakh is excluded from that category reducing the percentage of seats from 3 per cent to 1 per cent and a separate category has been made for candidates from the Ladakh district allotting 2 per cent of the seats to them. (3) Whereas in the earlier order 25 per cent of the seats was earmarked to ensure rectification of imbalance, here the figure is reduced to 20 per cent. About two years later, on April 21, 1976 another order was issued reducing the existing reservation of 20 per cent for meeting regional imbalance to 18 per cent and allotting "the resultant 2% vacancies" for candidates "possessing outstanding proficiency in sports". It is necessary to refer to two more orders. An order made on April 16, 1976 provides that 10 seats at the Government Medical College, Jammu, shall be earmarked for girl students "subject to enough girl students being found otherwise suitable". The order also lays down the procedure to be followed by the selection committee in selecting candidates for admission to technical training courses. By this order, comparative performance of the candidates at an interview to be conducted for the purpose by the selection committee is made the only basis of selection. The order adds that the marks obtained by a candidate in the qualifying university examination shall be taken into consideration only to determine the initial eligibility to compete for selection. This order was modified by a 1261 subsequent order issued on April 3, 1978. Instead of the marks obtained by a candidate in the qualifying university examination being treated as relevant only to determine eligibility, the subsequent order provides: "there will be 100 marks for academic merit which shall be allotted to each candidate in accordance with the percentage of marks secured by him/her in the basic qualifying examination or its equivalent". This order further provides that 50 marks will be allotted for interview, 10 marks for each of the five factors; physical fitness, personality, aptitude, general knowledge and general intelligence. Some of the categories mentioned in these orders have been challenged as arbitrary and unconstitutional. We may begin with the classification made for 'rectification or regional imbalance ' for which 18 per cent of the seats is reserved. The criticism is that the order creating this category does not identify the areas which suffer from imbalance nor does it supply any guidelines for the selection committee. It appears that the selection committee has admitted 9 candidates under this head whose names appear at serial Nos. 43 to 51 of the list of selected candidates annexed to the supplementary affidavit filed on behalf of the first respondent, State of Jammu and Kashmir. How exactly the selection committee understood what regional imbalance was and on what basis they accepted certain areas of the State as suffering from imbalance is not known. The supplementary affidavit seeks to explain the category as follows: ". the State Government has found that for peculiar historical, geographical and topographical reasons there prevails an imbalance in the matter of development of the various parts of the State which has resulted in certain areas being backward as compared with the rest. In order therefore to rectify the distortion which inevitably would otherwise creep into the selection, the State Government has reserved 18% of seats for rectification of such imbalance". The affidavit refers to the disadvantages suffered by areas which adjoin the actual line of control and the bad pockets and states: "likewise there are other areas in the State which have received lesser attention in the past in the matter of economic development. These areas, inter alia, are either inaccessible on account of difficult geographical terrain or suffer from difficult climatic condition. Naturally therefore the human resources from those areas have also not developed". It may be recalled that the notification dated June 21, 1979 by which applications were invited for admission to the medical college provided that the selection of candidates would be made in accordance with the manner and procedure laid down in the various orders issued by the Government from time to time, but none 1262 of these orders contains an explanation as the one now offered in the supplementary affidavit. Even with this explanation the affidavit does not identify the areas of imbalance. There was thus no objective standard to guide the selection committee. Mr. Kacker appearing for the State of Jammu and Kashmir sought to argue that by area of imbalance what was meant was really the same thing as areas adjoining actual line of control and bad pockets. But in all the orders issued by the Government from time to time the area of imbalance has been treated as a distinct category. Even in the supplementary affidavit it is not claimed that the area of imbalance is only another name for the areas adjoining the actual line of control and the bad pockets, what is said is that these are similar in being equally backward. But this does not mean that these categories are all identical and co extensive in all respects. It will be noticed that, in spite of the similarity, even areas adjoining the actual line of control and the bad pockets have been put under different categories. Mr. Kacker also urged that as the areas suffering from imbalance were backward areas, constituting a separate category for candidates coming from such backward areas was in accordance with the report of a committee headed by Mr. Justice Anand of Jammu and Kashmir High Court. The Anand Committee was appointed on August 24, 1976 to examine and remove defects in the Jammu and Kashmir Scheduled Castes and Backward Classes (Reservation) Rules, 1970 and the Jammu and Kashmir Scheduled Castes and Backward Classes (Reservation of Appointment by Promotion) Rules 1970. These rules were framed on the basis of the recommendations of a committee, called the Wazir Committee, set up in 1969 for drawing up a list of backward classes in the State. Mr. Justice J.N. Wazir, a former Chief Justice of Jammu and Kashmir High Court, was the Chairman of this Committee. The Wazir Committee submitted its report in November 1969 recommending several classes of citizens to be classified as backward classes. The validity of these Rules came up for scrutiny before this Court in Janki Prasad Parimoo and others etc. vs State of Jammu and Kashmir and others.(1) In Parimoo 's case certain defects in the 1970 Rules were pointed out and the Anand Committee was constituted, as stated already, "with a view to examine removal of defects" in the 1970 Rules. The Anand Committee submitted its report in September 1977. Mr. Kacker drew our attention to the fact that the report was debated on the floor of both houses of the Jammu and Kashmir legislature which resolved as 1263 follows: "The report need to be adopted by the Government as quickly as possible and rules made so that the backward classes could derive benefits quickly". It is not necessary to examine whether the Anand Committee report identifies the areas of imbalance in the State because the selection committee was required to follow not the Anand Committee report but what was provided in the orders passed by the Government. There is no order containing any reference to the Anand Committee report. There is also nothing to show that the Government had adopted the report of that the selection committee proceeded on the basis of that report. It appears from page 59 of the Anand Committee report that the Committee did not accept "social castes" as a category indicative of backwardness, but the selection committee has selected one candidate under this category which plainly shows that the selection committee was not guided by the Anand Committee report. There can be no doubt that the selections made were not and could not be on the basis of that report. It must therefore be held that the classification made for rectification of regional imbalance without identifying the areas suffering from imbalance is vague and the selections made under this head are accordingly invalid. In support of this contention that area of imbalance was only another name for bad pockets or areas adjoining actual line of control, Mr. Kacker claimed that the 9 candidates selected for 'rectification of imbalance ' all came from either bad pockets or from areas adjoining actual line of control. The claim was questioned by the petitioners who sought to disprove it by reference to the material on record. We do not consider it necessary to examine the individual cases here. It may be that some of these candidates really came from areas adjoining actual line of control or bad pockets, yet they cannot be accommodated unless the percentage of seats reserved for these two categories was raised. Another category under challenge is "social castes". Included in this category are candidates of the State belonging to any of the castes indicated in appendix III to the instructions forming part of the order dated July 9, 1973 to which reference has already been made. The Wazir Committee in their report mentioned 23 low social castes "as educationally and economically extremely backward" but 4 of them have been held by this Court in Parimoo 's case as having no basis for inclusion in the list. In appendix III 19 of these castes have been retained which were not disapproved in Parimoo 's case. Chapter XIII of the Wazir Committee report makes it clear that the classification is with reference to the nature of occupations which the people belong 1264 ing to this category pursue. That being so we find no substance in the challenge that the classification offends Article 14 or Article 15 of the Constitution. Under this category only one candidate has been selected whose name, Edwin Khokkar, appears at serial No. 33 in the list of selected candidates annexed to the supplementary affidavit filed on behalf of the State of Jammu and Kashmir. An objection was raised against his selection that he being a Christian, as his name shows, could not belong to any of the castes mentioned in appendix III. But as the category is based on occupation and not on caste as such, the objection must be overruled. The classifications based on areas adjoining actual line of control and bad pockets are also challenged as violative of Article 14 of the Constitution. These are really backward areas and the residents of these areas are indisputably socially and educationally backward. Reservations made for candidates from such backward classes cannot be said to offend Article 14. In fact in Parimoo 's case the reservation made for residents of bad pockets which were identified in the report of the Wazir Committee, was accepted as valid. We therefore hold that the challenge to these two categories is not justified. Apart from the challenge to some of the categories mentioned in the Government orders, the validity of interview as a test for selection has also been questioned, not only in principle but also in regard to the manner in which it was conducted. It was contended that interviewing candidates to judge their suitability was not a reliable test as many uncertain factors were likely to affect the result of the interview. The criticism reflects a legitimate point of view but it is a point of view only and cannot be taken as the last word on the subject. In this connection we may refer to the observations of this Court in R. Chitralekha and another vs State of Mysore and others :(1) "In the field of education there are divergent views as regard the mode of testing the capacity and calibre of students in the matter of admissions to colleges. Orthodox educationists stand by the marks obtained by a student in the annual examination. The modern trend of opinion insists upon other additional tests, such as interview, performance in extra curricular activities, personality test, psychiatric test etc. Obviously we are not in a position to judge which method is preferable or which test is the correct one". In A. Periakaruppan, etc. vs State of Tamil Nadu and others(2) this Court said: "In most cases the first impression need not necessarily be the best impression. But under the 1265 existing conditions in this country we are unable to accede to the contention of the petitioners that the system of interview as in vogue in this country is so defective as to make it useless". In almost all the writ petitions before us the oral test as conducted has been described as a "farce". The criticism is based on the allegation that the time spent on each candidate was between 1 1/2 and 2 minutes within which, it was contended, one could hardly assess the suitability of the candidate on a consideration of the five factors: physical fitness, aptitude, personality, general knowledge and general intelligence, some of which are also difficult to evaluate objectively. In an affidavit filed on behalf of the State of Jammu and Kashmir, sworn by Dr. A. H. Fazli, Professor of Pharmacology, Srinagar, who was one of the members of the selection committee, it is stated that on an average the time spent for interview was "4 minutes per candidate". Mr. Kacker for the State of Jammu and Kashmir submitted that it was a policy decision by the Government to convert the full marks of the qualifying examinations to 100 marks and allot 50 marks for interview for the purpose selection. He explained that the conversion was necessary because the candidates had appeared in different qualifying examinations and the total marks in the different examinations varied between 550 and 300. It was pointed out on behalf of the writ petitioners that allotment of 50 marks for interview after reducing the total marks of the written examination, where it was 550 to 100, amounted to allotting 275 marks for interview as against 550 marks for written examination. It was contended that this was beyond all reasonable proportion especially considering the fact that only 4 minutes were spent in evaluating a candidate 's performance in the interview. Our attention was drawn to Periakaruppan 's case where this Court thought "earmarking 75 marks out of 275 marks for interview as interview marks prima facie appears to be excessive". However the conclusion reached in Periakaruppan 's case on the point was: "While we do feel that the marks allotted for interview are on the high side and it may be appropriate for the Government to re examine the question, we are unable to uphold the contention that it was not within the power of the Government to provide such high marks for interview. . ". Reserving 50 marks for interview out of a total of 150 (100 for written examination and 50 for interview) does seems excessive especially when the time spent was not more than 4 minutes on each candidate. It is difficult to see how it is possible within this short span of time to make a fair estimate of a candidate 's suitability on a consideration of the five specified factors which are not capable of easy determination, such as physical fitness, personality aptitude, general knowledge and general intelligence. It is also not clear how by 1266 merely looking at a candidate the selection committee could come to a conclusion about his or her physical fitness. The fact that the allotment of marks is in accordance with a policy decision may not conclude the matter in all circumstances; if that decision is found to be arbitrary and infringing Article 14 of the Constitution, it cannot claim immunity from challenge. When we say this we are not unmindful of the observations in Periakaruppan 's case quoted above, which were made in a somewhat similar but not altogether identical situation. It was also contended for the writ petitioners that reserving such high marks for interview leaves room for discrimination and manipulation. It has been held in Chitralekha 's case that the fact that a system is capable of abuse is not a ground for quashing it. There is no reliable material before us to prove that there has been discrimination or manipulation of the interview marks in any of these cases. That being so, and considering the possible hardship, if the selections were now set aside, to the students in whose case the validity of the selection cannot otherwise be questioned and who have nearly completed two terms, we are not inclined to annul the entire selection, though allotment of 50 marks for interview in the circumstances stated above seem to us excessive. However, we expect the Government of Jammu and Kashmir to reconsider the matter in the light of what we have said above and, other things remaining the same, for future years to reduce the percentage of marks allotted for interview to a reasonable proportion of the total marks for the selection test. Counsel for the petitioners in Writ Petitions 1556 57 of 1979 sought to make a point that the regulations framed by the Indian Medical Council under the do not contemplate interview as a selection device regulating admission of students. The position is not so clear from the affidavit filed on behalf of the petitioners and in any case these regulations came into effect after the interviews were concluded in September 1979. The selection of one candidate has been questioned on the ground that he does not fall under any of the categories mentioned in the orders. Shri Sanjay Pathania whose name appears at serial No. 52 in the list of candidates annexed to the supplementary affidavit filed on behalf of the State of Jammu and Kashmir appears to have been selected under the category "Wards of Medical College Staff". It was argued that this category is not based on a valid classification and infringes Article 14 of the Constitution. It is not necessary to examine the validity of the classification for the simple reason that this is not a category mentioned in any of the orders. That being so the selection of Shri Pathania must be set aside. 1267 Earlier in this Judgment it has been stated that following a request made by the Government of India 10 per cent of the seats in the College was reserved for students from other States on reciprocal basis. This was a policy decision. However, the way the policy has been worked is criticised by the writ petitioner in writ petition No. 29 of 1980, Miss Anita Jain. Pursuant to this policy 5 students from Rajasthan and 1 from Andhra Pradesh were admitted to the Government Medical College, Jammu. Miss Jain states that she was a candidate for admission to the Medical College, Jammu, for the session 1979 80. On November 8, 1979 the Government of Jammu and Kashmir informed her by a letter that she had been nominated for admission to the first year M.B.B.S. course in one of the medical colleges in Madhya Pradesh. When she went to Bhopal for admission on the basis of the said letter she was refused admission on the ground that the State of Jammu and Kashmir had not admitted nominees of the Madhya Pradesh Government and unless they were admitted she would not be admitted to any medical college in the State of Madhya Pradesh. Her grievance is that even after she had informed the Government of Jammu and Kashmir of what had happened, the Government did not take any step to get her admitted to any medical college in the State or outside. It does not appear from the affidavits filed by the State of Jammu and Kashmir if the candidates admitted to the Government Medical College, Jammu, from outside the State are equal in number to those from the State who have been nominated for admission to outside institutions, and on what basis the nominations, whatever the number is, have been made. Anita Jain 's case makes it clear that the reciprocity policy, has not worked as it should have. Miss Jain 's counsel informed us that Miss Jain 's was willing to go to any State for admission to a medical college. Having nominated her for admission to an outside institution, we do not think the Government can avoid responsibility now. We therefore direct the first respondent, State of Jammu and Kashmir, to find her a seat in any medical college outside the State on the basis of reciprocity, unless as a result of our Judgment a few more seats are available in the medical college at Jammu and she is entitled to one of them on merit. For disposing of this writ petition it is not necessary to dilate on the problems that failure of the reciprocity policy in Miss Jain 's case brings to prominence. It now remains to deal with two more individual cases, one of improper nomination and the other of unjust rejection. In the list of nominated candidates, the name of Harish Kumar appears against serial No. 62. Nomination, as stated earlier, was to be made from two classes of students candidates from outside the State of Jammu 1268 and Kashmir and wards of Defence personnel (non residents). There is no dispute that Harish Kumar belongs to the State of Jammu and Kashmir and it is not claimed that he falls in the other class. There was therefore no basis on which Harish Kumar could be validly nominated. Mr. Kacker, counsel for the State of Jammu and Kashmir, also did not try to justify Harish Kumar 's nomination. Harish Kumar 's admission to the medical college must therefore be set aside. The petitioner in writ petition No. 201 of 1980 Kulbhushan Gupta obtained 104 marks out of total 150 marks. Of the 31 candidates who were selected on open competition, the one whose name appears 25th in order of merit got 103.25 marks out of 150. But Kulbhushan Gupta was not selected on the plea that he had been selected earlier for Regional Engineering College. The notification dated June 21, 1979 by which applications were invited for admission to medical college, Jammu, for the year 1979 80 includes to clauses Nos. 17 and 18 which are as follow: "17. The candidates, while applying for admission to the M.B.B.S. Course, should specifically mention in their application forms that they have not been selected/nominated by the Govt. of J & K for any training course within or outside the J & K State. The candidates, who have already been selected by any other selection committee constituted by the Govt. Of J & K for any other training course within or outside the State, are not eligible to apply or to appear for interview for admission to this college. A candidate who tries to cheat the Selection Committee on this account, will be disqualified and even if selected under false pretence will not be given admission, or if he/she has secured admission, his/her admission will stand null and void. " It was contended that in view of these conditions Kulbhushan Gupta was not eligible for selection though no objection was raised when he appeared for interview. That he is a student of the Regional Engineering College is not disputed, but it appears that he was not selected or nominated by the Government of Jammu and Kashmir for admission to the engineering college nor was he selected by any selection committee constituted by the Government of Jammu and Kashmir. Clearly, therefore, the bar in clause 17 or clause 18 cannot apply to his case, and it must be held that he was improperly refused admission to the Government Medical College, Jammu. Kulbhushan Gupta is entitled on merit to a seat in the College. 1269 The conclusions we have reached on the various issues do not warrant cancellation of the entire list of candidates admitted to the Government Medical College, Jammu, for the 1979 80 session of the M.B.B.S. course but call for a revision of the list. We therefore direct as follows: (1) As the classification made for "rectification of regional imbalance" without identifying the areas of imbalance has been held invalid, the seats reserved under this head may be added to the quota of seats earmarked for selection on the basis of merit and filled accordingly. Even if some of the candidates who have been selected under this category were eligible for selection as candidates from areas adjoining actual line of control or bad pockets, they cannot be accommodated unless the percentage of seats reserved for these two categories was raised. (2) As the selection of Shri Sanjay Pathania (No. 52 in the list of selected candidates) under the category "wards of medical college staff" has been set aside, one more seat should therefore be added to the "open merit" quota and filled accordingly. (3) The Government must find a seat for the petitioner in writ petition No. 29 of 1980. Miss Anita Jain, who was nominated for admission to an outside institution, in any medical college outside the State unless as a result of the revision of the list of candidates admitted she finds a place in the Medical College, Jammu, on the basis of merit. (4) The admission of Harish Kumar (No. 62 in the list of admitted candidates) has been set aside. To complete the quota of nominated candidates another candidate in his place may be nominated if the Government so desires. (5) The petitioner in writ petition No. 201 of 1980 Kulbhushan Gupta, it has been found, was wrongly refused admission. He is entitled on merit to a seat. The writ petitions therefore succeed to the extent indicated above. In the circumstances of the cases there will be no order as to costs. 1270 We are conscious that revision of the list of selected candidates at this stage will not only cause hardship to the students who will be excluded but some of those who might get into the list now are also likely to experience certain difficulties. We are also conscious that the late revision of the list will create problems for the authorities but that, we are afraid, cannot be helped. We hope the authorities will deal sympathetically with the cases where it may be possible for them to render some help to the students in this situation and relax the rigour of the rules to the utmost permissible extent for the purpose. S.R. Petitions allowed.

The selection of candidates admitted to the Government Medical College, Jammu are to be made in accordance with the manner and procedure laid down in the various orders issued by the Government of Jammu and Kashmir from time to time. The earliest order made on July 9, 1973 concerns admission to technical institutions which include medical colleges and says that "the man power requirements of various parts of the State have not received uniform and equal treatment with the result that there has been imbalance in the development of human resources in these parts", and "since the admissions to technical institutions also lead to the development of human resources", it had, therefore, "become necessary to provide equal opportunities to the permanent resident candidates of all parts of the State and all sections of the society". As, per this order 50% of the seats were earmarked for selection on open competition, 25% of the seats were reserved for candidates belonging to the categories specified in clause (2) of the order according to the percentage indicated against each. It was further provided in the order that after selection, as above, the remaining 25% of the seats "should be filled on the basis of inter se merit to ensure rectification of imbalance in the admissions for various parts of the State, if any, so as to give equitable and uniform treatment to those parts". In case there was no "visible imbalance" or where no candidates were available under a particular category mentioned in clause (2) above the seats earmarked under these two heads "shall be added to the percentage under [clause] I above". The annexure to the order contained instructions concerning the "identification of the persons claiming benefit" under clause 2 of the order and "the procedure connected therewith". The instructions defined the different categories mentioned in clause (2): "Areas adjoining actual line of control Candidates permanently residing in any village of the State specified in Appendix I to these instructions". "Bad pockets Candidates permanently residing in any village of the State specified in Appendix II to these instructions". "Social Castes Candidates of the State belonging to any of the castes indicated in Appendix III to these instructions". The instructions also provided for the issue of a certificate by the concerned authority stating that a candidate fell under any of the categories. 1254 On June 27, 1974 another order was issued refixing the percentage of seats reserved for the different categories "with a view to affording more accommodation for open merit". Open merit percentage was increased to 60, by reducing by 5% the percentage of seats allotted for children of freedom fighters and by reducing the percentage of seats of 25% earmarked to ensure "rectification of imbalance" from 25% to 20%. 3% of seats reserved for candidates from areas known as bad pockets which included Ladakh under the category "socially and educationally backward classes" was reduced to 1% and the resultant difference of 2% was earmarked to candidates from Ladakh which was excluded from the above category. By another order dated April 21, 1976, the existing reservation of 20% for meeting regional imbalance was reduced to 18% and the "resultant 2% vacancies earmarked for candidates possessing, outstanding proficiency in sports". An order made on April 16, 1976 earmarked 10 seats at the Government Medical College, Jammu, for girl students "subject to enough girl students being found otherwise suitable". The order also laid down the procedure to be followed by the selection committee in selecting candidates for admission to technical training course. By this order, comparative performance of the candidates at an interview to be conducted for the purpose by the selection committee was made the only basis of selection. The order added that the marks obtained by a candidate in the qualifying university examination should be taken into consideration only to determine the initial eligibility to compete for selection. This order was modified by a subsequent order issued on April 3, 1978. Instead of the marks obtained by a candidate in the qualifying university examination being treated as relevant only to determine eligibility, the subsequent order provided: "there will be 100 marks for academic merit which shall be allotted to each candidate in accordance with the percentage of marks secured by him/her in the basic qualifying examination or its equivalent". This order further provided that 50 marks would be allotted for interview, 10 marks for each of the five factors: physical, fitness, personality, aptitude general knowledge and general intelligence. By notification published in the Jammu and Kashmir Government Gazette on June 21, 1979 applications were invited for admission to the M.B.B.S. course in the aforesaid college. Only those candidates who had passed the Pre Medical or Inter Science or First Year T.D.C. (Medical Group) examination from the University of Jammu or any other equivalent examination and had secured not less than 50 per cent marks in science subjects in aggregate (theory and practical) were eligible to apply for admission; however, for scheduled castes, scheduled tribes Bakarwal and Gujjar candidates and candidates from Ladakh district and 'Bad pockets ' the qualifying marks was 45 per cent. Candidates who had been selected or nominated by the Government of Jammu and Kashmir or had been already selected by a selection committee constituted by the Government for any training course in or outside the State were not eligible to apply or to appear for interview for admission to this college. The notification added: "Comparative merit of the candidates will be adjudged with respect to physical fitness, aptitude personality, general knowledge and general intelligence in the interview, for which marks will be awarded according to the performance of the candidates". It was further provided that the selection would be made in accordance with the manner and procedure laid down in the various orders issued by the Government from time to time. The total number of seats filled by selection in this college for the year 1979 80 was 52. The candidates numbered 526, out of which 473 actually appeared for interview. In addition 10 1255 seats were filled by candidates nominated by the Government. The nomination had to be made only from two sources: wards of non resident Defence personnel, and students from other states. The petitioners challenged the selection of candidates admitted to the Government Medical College, Jammu for the academic year 1979 80 as bad and that the categories mentioned in the several orders as arbitrary and unconstitutional. ^ HELD: 1. The classification made for rectification of regional imbalance is vague and the selections (serial Nos. 43 to 51 to the List) made under this head are invalid for the following reasons: [1263 C D,] (i) The notification dated June 21, 1979 by which applications were invited for admission to the medical college provided that the selection of candidates would be made in accordance with the manner and procedure laid down in the various orders issued by the Government from time to time, but none of these orders contains an explanation offered in the supplementary affidavit filed by the State of Jammu & Kashmir that: ". the State Government has found that for peculiar historical, geographical and topographical reasons there prevails an imbalance in the matter of development of the various parts of the State which has resulted in certain areas being backward as compared with the rest. In order therefore to rectify the distinction which inevitably would otherwise creep in to the selection, the State Government has reserved 18% of seats for rectification of such imbalance". Even with this explanation, the affidavit, does not identify the area of imbalance. There was thus no objective standard to guide the selection committee. [1261 E H, 1262 A] (ii) Even in the supplementary affidavit it is not claimed that the area of imbalance is only another name for the areas adjoining the actual line of control and the had pockets, as contended on behalf of the State. What is said in the affidavit is that the areas of imbalance are similar to the aforesaid areas in being equally backward. But this does not mean that these categories are all identical and co extensive in all respects. Further in spite of similarity, even areas adjoining the actual line of control and the bad pockets have been put under different categories; and [1262 B ] (iii) The contention was that the classification was justified on the report of the Anand Committee. The Selection Committee was required to follow not the Anand Committee report but what was provided in the orders passed by the Government. There is no order containing any reference to the Anand Committee Report. Neither the Government adopted the Anand Committee 's report nor did the Selection Committee proceeded on the basis of that report. Though the Anand Committee did not accept "social castes" as a category indicative of backwardness, the Selection Committee has selected one candidate under this category which clearly shows that the Selection Committee was not guided by the Anand Committee Report, the selection made was not and could not be on the basis of that report. [1263 A C] 2. In Janki Prasad Parimoo and Ors. vs State of Jammu and Kashmir and Ors., [1973] 3 SCR p. 236, the Supreme Court did not approve 4 out of 23 "low social castes" mentioned in the Wazir Committee Report "as educationally and economically extremely backward", as having no basis for inclu 1256 sion in the List. In Appendix III, 19 of these castes have been retained which were not disapproved in Parimoo 's case. Chapter XIII of the Wazir Committee report makes it clear that the classification is with reference to the nature of occupations which the people belonging to this category pursue. That being so, the classification does not offend Article 14 or Article 15 of the Constitution. The selection of Edwin Khakkar, a Christian is in order since he falls under one such category listed and since the category is based on occupation and not on caste as such. [1263 G H, 1264 A B] 3. The areas adjoining actual line of control and bad pockets are really backward areas and the residents of these areas are indisputably socially and educationally backward. Reservations made for such candidates from such backward classes cannot be said to offend Article 14 of the Constitution. [1264C D] Janaki Prasad Parimoo and Ors. etc. vs State of Jammu & Kashmir and Ors., [1973]3 SCR p. 236; followed. Though the contention that "interviewing candidates to judge their suitability was not a reliable test as many uncertain factors were likely to affect the result of the interview" reflects a legitimate point of view, but it is a point of view only and cannot be taken as the last word on the subject. However, it is impossible within allotted span of time (4 minutes) to make a fair estimate of a candidate 's suitability on a consideration of the five specified factors which are not capable of easy determination such as physical fitness, personality, aptitude, general knowledge and general intelligence. By merely looking at a candidate, the selection committee could not come to a conclusion about one 's physical fitness. Therefore, the fact that the allotment of marks is in accordance with a policy decision may not conclude the matter in all circumstances; if that decision is found to be arbitrary and infringing Article 14 of the Constitution it cannot claim immunity from challenge. [1264 E H, 1265 G H, 1266 A] R. Chitralekha and anr. vs State of Mysore and Ors. ; ; A Peeriakaruppan etc. vs State of Tamil Nadu and Ors., [1971] 2 SCR 430; distinguished and held inapplicable to the facts of the instant case. The selection under the category "wards of Medical College Staff" is invalid as such a category does not find place in any of the orders. [1266 G H] 6. Reservation for students from other states on reciprocal basis, as seen from Anita Jain 's case has not worked in practice and she is entitled to a seat. Nor did the two clauses 17 and 18 of the notification dated June 21, 1979 apply to Kulbhushan Gupta since he was not selected or nominated by the Government of Jammu and Kashmir for admission to the Engineering College nor was he selected by any selection committee constituted by the Government of Jammu and Kashmir. [1267 E H, 1268 G H]

Civil Appeal No. 2622 of 1987 From the Judgment and order dated 6.8.1985 of the Bombay High Court in Appeal No. 139 of 1984. V.S. Desai and A.S. Bhasme for the Appellants. G.L. Sanghi, D. Chandrachud and Ms. Rainu Walia for the Respondents. The Judgment of the Court was delivered by RANGANATHAN, J. The question raised in this appeal is a somewhat unusual one. The State Government wants to withdraw proceedings for acquisition of lands initiated by it under the Land Acquisition Act (hereinafter referred to as 'the Act ') by exercising its power under section 48 but the owner of the land is insisting that the Government should be directed to go ahead with the acquisition, taken over the lands and pay him compensation. The reasons for this some 593 what unusual request will become apparent a little later. By a notification dated 6th November, 1961, issued under section 4 of the Act, certain lands belonging to the respondent company were notified for acquisition in order to accommodate housing schemes of the Maharashtra Housing Board. This was followed up, on 18th November, 1965, by a declaration under section 6 of the Act and, on 15th January, 1966, by notices calling upon the respondent to put forward its claims of compensation in respect of the land sought to be acquired. Thereafter, however, no further proceedings were taken. In the meantime it appears that the lands were encroached upon by a large number of trespassers who put up slums thereon. The respondent repeatedly requested the State Government to take steps to remove the encroachments and to expedite the making of the award and payment of compensation but these requests went unheeded. The respondent thereupon filed Miscellaneous Petition No. 1803/78 in the High Court of Bombay praying, inter alia, for a Writ of Mandamus directing the State Government to make the award under section 11 of the Act and to take possession of the lands after payment of due compensation to the respondent. On 25th March, 1981, the State Government passed orders withdrawing the lands of the respondent from acquisition under section 48 of the Act. The respondent was informed of this decision on the 20th of October, 1981 and an affidavit to this effect was also filed in the High Court in reply to the Writ Petition. Thereupon the respondent company amended its Writ Petition, challenged the withdrawal order as mala fide and included a prayer for quashing the decision of the State Government to withdraw its lands from the acquisition. This Writ Petition was allowed by a learned Single Judge of the High Court on 9.11.83 and his decision was affirmed by a Division Bench on 6th August, 1985. The State Government has preferred this appeal. The contention of the respondent before the High Court was that the State Government had acted mala fide in invoking the power of withdrawal permitted by section 48 in the facts and circumstances of the present case. It was contended that the purpose for which the lands had been sought to be acquired continued to subsist and that, all along, in the correspondence between the parties the State Government had given no indication that the lands were no longer needed by it for that purpose. It was urged that the order under section 48 had been passed, after the respondent company filed a writ petition, solely with a view to defeat the relief claimed by the Company in the writ 594 petition and render the same infructuous. It was submitted that the A respondent had not been able to take steps to remove the encroachments because of the pendency of the proceedings for acquisition inasmuch as under section 24 of the Act any expenditure incurred by the company in this regard could not be taken into account in determining the compensation due to the respondent. It was pointed out that while the company was helpless in defending itself against the encroachments, the State had ample powers, while taking possession of the lands to remove the trespassers and enforce the surrender of the lands to the Government both under the Land Acquisition Act and the Maharashtra Land Revenue Code. It was urged that the long delay of about 20 years in taking the step of withdrawal showed mala fides on the part of the Government. A grievance was also made that no show cause notice had been given to the respondent company before the withdrawal order was passed. These contentions (except the last one which was left open) were accepted by the High Court. We are of opinion that the High Court erred in striking down the order under section 48 and compelling the State Government to acquire the lands of the respondent. Under the scheme of the Act, neither the notification under section 4 nor the declaration under section 6 nor the notice under section 9 is sufficient to divest the original owner of, or other person interested in, the land of his rights therein. Section 16 makes it clear beyond doubt that the title to the land vests in the Government only when possession is taken by the Government. Till that point of time, the land continues to be with the original owner and he is also free (except where there is specific legislation to the contrary) to deal with the land just as he likes, although it may be that on account of the pendency of proceedings for acquisition intending purchasers may be chary of coming near the land. So long as possession is not taken over, the mere fact of a notification under section 4 nor declaration under section 6 having been made does not divest the owner of his rights in respect of the land or relieve him of the duty to take care of the land and protect it against encroachments. Again, such a notification does not either confer on the State Govt. any right to interfere with the ownership or other rights in the land or impose on it any duty to remove encroachments therefrom or in any other way safe guard the interests of the original owner of the land. It is in view of this position, that the owner 's interests remain unaffected until possession is taken, that section 48 gives a liberty to the State Government to withdraw from the acquisition at any stage before possession is taken. By such withdrawal no irreparable prejudice is caused to the owner of the land, and if at all he has suffered any damage in cor 595 quence of the acquisition proceedings or incurred costs in relation thereto, he will be compensated therefor under section 48(2). In this view of the matter, it does not matter even if there is lapse of considerable time between the original notification and the withdrawal under section 48 as held in Trustees of Bai Smarth Jain Shvetambar Murtipujak Gyanodhyaya Trust and others vs State of Gujarat and another. , AIR 1981 Gujarat 107. It also follows that the State can be permitted to exercise its power of withdrawal unilaterally and no requirement that the owner of the land should be given an opportunity of being heard before doing so should be read into the provision. The High Court has taken the view that a decision of withdrawal from acquisition must be backed by reasons and cannot be arbitrary or whimsical. We may observe that having regard to the scheme of the Act as discussed above, it is difficult to see why the State Government should at all be compelled to give any cogent reasons for a decision not to go ahead with its proposal to acquire a piece of land. It is well settled in the field of specific performance of contracts that no person will be compelled to acquire a piece of land as any breach of a contract to purchase it can always be compensated for by damages. That is also the principle of section 48(2). But this consideration apart, and even assuming that a withdrawal order under section 48 should be backed by reasons and should be bona fide, we are of the opinion that in the present case the order is not vitiated in any manner. The Government had intended to acquire a vast piece of vacant land for construction of houses by the State Housing Board. But this land had been over run by slum dwellers to such an extent that it was no longer possible for the Government to effectuate the intended purpose af acquisition. The High Court 's observations that "the respondents have not stated in their affidavit that the lands in question are unsuitable for the purpose in question" and that "the purpose continues to exist" lose all meaning in the face of the finding recorded by the High Court itself at another place that "the lands of the petitioners today are fully occupied by unauthorised hutments which have come up on these lands, rendering the lands worthless. " The basic question is really whether the Government can be held responsible for this state of affairs and can be compelled to go ahead with the acquisition though its purpose could not be achieved. We have already pointed out that the State can not be held responsible for the occupation of the land by trespassers. It is true that if the Government decides to go ahead with the acquisition and to take possession of the land, it has powers to evict trespassers and to, secure possession of the land but, for this reason alone, they cannot be compelled to go ahead with the acquisition. In the conditions presently 596 prevailing in major metropolitan cities, such eviction, for the Government, poses more serious difficulties than to a private person like the respondent company and it is common experience that, far from removing such encroachments, Government and municipalities are constrained to "regularise" them and provide them with civic necessities, Enactments like the Slums Act and the Urban Land Ceiling and Regulation Act have further complicated the situation. Where slum dwellers on a large scale occupy pieces of land, social and human problems of such magnitude arise that it is virtually impossible for municipalities, and no mean task even for the Government, to get the lands vacated. If the Government is reluctant to go ahead with the acquisition in view of these genuine difficulties, it can hardly be blamed. We see no justification to direct the Government to acquire the land and embark on such a venture. We are also of the opinion that the fact that the Government exercised the power of withdrawal after the writ petition was filed does not spell mala fides, once the existence of circumstances, which, in our opinion, justified the Governments decision to withdraw, is acknowledged. The High Court, in this context, has referred to section 24 of the Act and pointed out that the respondent company could not afford to take steps for the eviction of the slum dwellers as it might incur in this behalf will not be taken into account in determining the compensation payable to it under the Act. This is not strictly correct for under section 24, it was open to the respondent company to have incurred such expenditure with the sanction of the Collector and claimed reimbursement but the respondent company did not seek the sanction of the Collector in this regard. That apart, this clause of section 24 is only a provision laying down the rule that the State will, generally speaking, pay for the land only in the condition in which it was on the date of the section 4 notification and that subsequent changes on the land will not be taken into account in the determination of the compensation. It cannot follow from this provision that the State should be compelled to take over the land because the owner of the land will need to take care of it at his own cost until it vests in the Government. Far from a decision to withdraw in such cases as the present one, being considered to be mala fide, it could be perhaps said with greater truth that the Government would have been acting mala fide if, despite the clear knowledge that the land could not any longer be used for the purpose for which it had been acquired, it decided to go ahead with the acquisition. We are emphatically of the view that the State Government has acted in best interests of the public and of public revenues and its decision cannot be faulted. 597 Before we conclude we may point out that somewhat similar questions came up for the decision of this Court in an appeal preferred by the State of Maharashtra, from an order of the Bombay High Court reported as M/s. Majas Land Development Corpn. & another vs State of Maharashtra and others, AIR 1983 Bombay 188. The special leave petition preferred by the State against the order of the High Court to a like effect was set aside by this Court, vide its order of August 1983, in Civil Appeal No. 6086 of 1983, by pointing out that it is open to the State Government to release the lands from acquisition and that the Land Acquisition officer cannot be compelled to make the award. It was, however, pointed out that the Government will be liable to pay compensation to the claimants under section 48(2) of the Land Acquisition Act. In the affidavit filed by the appellants before the High Court in the present case they have already called upon the respondent company to furnish details of claims, if any, regarding the compensation claimed under section 48. It is open to the respondent company to pursue this claim and the State Government will dispose of the same in accordance with law. We are therefore of the opinion that the order passed by the State Government under section 48 should be upheld and the release of the lands from acquisition sustained. Learned counsel for the respondent company contended that at the time the land was initially acquired under section 4 there had been a proposal that the Government should grant in favour of the company some land contiguous to section No. 40, Hissas Nos. 2 & 3, in exchange for the land sought to be acquired and that the appellants should be directed to give or sell some land to the petitioner. We are unable to follow how any such proposal, even if made originally, could survive in view of the acquisition proceedings having been dropped. However, we express no opinion in this regard and leave it to the company, if so advised, to pursue the matter with the Government. For the reasons discussed above, the civil appeal is allowed and the orders of the High Court dated 9.11.1983 and 6.8.1985 are set aside. The Rule issued by the High Court stands discharged. However, in the circumstances of the case, we make no order as to costs. S.L. Appeal allowed.

% The State Government, by a notification dated November 6, 1961, issued under section 4 of the Land Acquisition Act, notified for acquisition lands belonging to the respondent. This was followed by a declaration dated November 18, 1965, under section 6 of the Act, and the notices calling upon the respondent to put its claims for compensation in respect of the lands sought to be acquired. Thereafter, no further action was taken in this behalf. In the meantime, the lands in question were encroached upon by a large number of trespassers who put up slums thereon. The respondent repeatedly asked the State Government to take steps to remove the encroachments and expedite the making of the award and payment of the compensation but no action was taken by the Government. The respondent thereupon filed a Writ Petition in the High Court for a writ of mandamus, directing the State Government to make the award under section 11 of the Act, and take possession of the lands after payment of the compensation to the respondent. On March 25, 1981, the State Government passed an order under section 48 of the Act, withdrawing the lands of the respondent from acquisition, and the respondent was, accordingly, informed of that decision. The respondent thereupon amended its writ petition to challenge the withdrawal order above said as mala fide and to pray for the quashing of the same. The writ petition was allowed by a Single Judge of the High Court and his decision was affirmed by a Division Bench of the High Court. Aggrieved, the State Government appealed to this Court, against the decision of the High Court. Allowing the appeal, the Court, ^ HELD: The High Court erred in striking down the order under section 48 of the Land Acquisition Act and compelling the State 591 Government to acquire the lands of the respondent. Under the scheme of the Act, neither the notification under section 4 nor the declaration under section 6 nor the notice under section 9 is sufficient to divest the original owner of, or other person interested in, the land of his rights therein. Section 16 makes it clear beyond doubt that the title to the land vests in the Government only when possession is taken by the Government, and till that point of time, the land continues to be with the original owner and he is also free (except where there is specific legislation to the contrary) to deal with the land just as he likes. So long as the possession is not taken over, the mere fact of a notification issued under section 4 or a declaration made under section 6, does not divest the owner of his rights in the land to take care of it and confer on the State Government any right whatsoever to interfere with the ownership of the land or safeguard the interests of the owner. Section 48 gives liberty to the State Government to withdraw from the acquisition at any stage before the possession of the land is taken by it. By such withdrawal, no irreparable prejudice is caused to the owner of the land, and, if at all the owner has suffered any damage in consequence of the acquisition proceedings or incurred costs in relation thereto, he will be compensated therefor under section 48(2). As held in Trustees of Bai Smarth Jain Shvetamber Murtipujak Ganodhaya Trust and Ors. vs State of Gujarat and another, AIR 1981 Gujarat 107, the State can be permitted to exercise its power of withdrawal unilaterally. Having regard to the scheme of the Act, it is difficult to see why the State Government should at all be compelled to give any cogent reasons for its decision not to go ahead with the acquisition of any land, as was the view of the High Court. It is well settled in the field of specific performance of contracts that no person will be compelled to acquire any land, as a breach of a contract can always be compensated for by damages. That is also the principle of section 48(2) of the Act. [594D H; 595A D] Even assuming that a withdrawal order under section 48 should be backed by reasons and should be bonafide, in the present case, the order is not vitiated in any manner. The Government had intended to acquire vacant land for the construction of houses, but his land had been over run by slum dwellers to such an extent that it was not possible for the Government to effectuate the intended purpose of acquisition. The Government cannot be compelled to go ahead with the acquisition. Where slum dwellers on a large scale occupy pieces of land, social and human problems of such a magnitude arise, that it is virtually impossible for municipalities, and no mean task for the Government, to get the lands vacated, and in view of these genuine difficulties if the Government is reluctant to go ahead with the acquisition, it can hardly 592 be blamed. The Court sees no justification to direct the Government to embark upon such a venture to acquire the land. Section 24 of the acts lays down the rule that the State will, generally speaking, pay for the land only in the condition in which it was on the date of issue f the notification under sec. 4, and that subsequent changes on the land will not be taken into account in the determination of the compensation. The fact that the Government exercised the power of withdrawal after the writ petition was filed, does not spell mala fides, once, the existence of circumstances, which justified the decision of the Government to withdraw, is acknowledged. Far from a decision to withdraw in such a case being considered mala fide, the Government would have been acting mala fide if, despite the clear knowledge that the land could not be used for its purpose, it had decided to go ahead with the acquisition. The State Government has definitely acted in the best interests of the public and public revenues and its decision could not be faulted. [595D F, H; 596B; F H] Appeal allowed. Orders impugned of the High Court set aside. n Rules issued by the High Court discharged. [597G] M/s. Majas Land Development Corpn. and another vs State of Maharashtra and others, AIR 1983 Bombay 188, referred to.

minal Appeal No. 128 of 1962. Appeal from the judgment and order dated January 30, 1962, of the Calcutta High Court in Criminal Appeal No. 429 of 1960. section C. Mazumdar, for the appellant. P. K. Chakravarti and P. K. Bose, for the respondent No. 2. The Judgment of the Court was delivered by Wanchoo, J. This is an appeal on a certificate granted by the Calcutta High Court. The appellant hired a westing house, 399 D. C. motor from the Modem Electrical Works (hereinafter referred to as the Works) on April 4, 1958 on a rent of Rs. 40 per month. The hiring period was to last for at least three months and it was agreed that if the motor or parts thereof were lost or damaged by the appellant, he would be bound to pay the whole cost of the motor and the parts. The motor remained in the use of the appellant and hire charges were paid by him from April 1958 to January 1959. Thereafter it is said that no hire charges were paid. On June 8, 1959, the appellant wrote a letter to the Works in which he said that he had purchased the motor in question for Rs. 600 on condition that the same would be tried for three months, and if it was found satisfactory the money would be paid and the purchase completed. The letter also stated that the agreement was that if the motor was not found satisfactory, the appellant would pay three months ' hire at Rs. 40 per month and the motor would be returned thereafter. Finally, the appellant said in the letter that the Works had been paid Rs. 620 in all and thus the purchase had been completed. The appellant therefore requested the Works to give him a slip saying that the motor had been sold to the appellant, as no further money was due to the Works. On June 15, 1959, the Works sent a reply to the appellant denying that any such agreement as was alleged by the appellant had been made. It was also denied that Rs. 620 had been paid, and therefore the purchase was complete. Finally it was said that the appellant had only paid Rs. 400 and Rs. 200 were still due from him for the months of February to June 1959. The appellant replied to this letter in which he reiterated his stand taken in the earlier letter and gave details of how the payment of Rs. 620 had been made. Thereafter the Works filed a complaint through its servant Mohd. Ayub on July 1, 1959 in which after stating its case it urged that the appellant had committed criminal breach of trust and was therefore guilty under section 406 of the Indian Penal Code. On this complaint the appellant was summoned by the Presi dency Magistrate 9th Court, Calcutta and after taking some evidence for the prosecution, the Magistrate discharged the appellant holding that there was no satisfactory evidence of dishonest misappropriation or conversion of the motor by the appellant to his own use and that the dispute between the parties was essentially of a civil nature. Mohd. Ayub then went in revision to the High Court. The High Court set aside the order of discharge and directed further enquiry in the matter by another Magistrate. The case then went back to the Third Presidency Magistrate, Calcutta, 400 who eventually found the appellant not guilty and ordered his acquittal on the ground that there was dispute between the parties as to the actual nature of the transaction and it could not be said that there was any dishonest intention on the part of the appellant to misappropriate the motor. Mohd. Ayub then filed an appeal before the High Court under section 417(3) of the Code of Criminal Procedure. Eventually the matter was heard by a Division Bench of the High Court, and it came to the conclusion that it was clear from the letter of June 8, 1959 (to which we have already referred) that the same could not have been written unless the appellant dishonestly in violation of the entrustment wanted to cause wrongful loss to the complainant and wrongful gain to himself. It was further held that the letter did not show that there was a bona fide claim of ownership over the property and the claim was merely a pretence which could not exonerate the appellant from being punished under section 406 of the Indian Penal Code. 'The appellant then applied for a certificate to enable him to file an appeal to this Court, which was granted; and that is how the matter has come up before us. We are of the opinion that this appeal must succeed. It is not in dispute between the parties that the motor was entrusted to the appellant by the Works for his use. The dispute was whether this entrustment was merely by way of hire (which was the case of the Works) or, as was the case of the appellant, was on the basis of an agreement between the parties that the appellant would purchase the motor if he found it satisfactory after trying it for .three months and pay Rs. 600 as the price and that he would return it if he found it unsatisfactory during this period of three months and pay Rs. 40 each month as hire for that period. The real dispute between the parties therefore was as to the nature of the agreement between them when the motor was entrusted to the appellant in April 1958. That dispute was clearly of a civil nature. The Works however contended that by writing the letter of June 8, 1959 the appellant committed breach of trust and was guilty under section 406 of the Indian Penal Code. Now in that letter the appellant put forward his side of the case as to the terms of the agreement when he took delivery of the motor in April 1958. The question is whether by writing that letter the appellant could be said to have committed the offence defined in section 405 of the Indian Penal Code and punishable under section 406 thereof. Now section 405 runs as follows : "Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly mis 401 appropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits criminal breach of trust. " It may be accepted that the appellant was entrusted with the motor by virtue of the agreement between him and the Works, the terms of which are seriously in dispute. The question however is whether the 'appellant dishonestly misappropriated or converted to his own use that motor. On the facts in the present case the motor was handed over to the appellant for his use even according to the case of the Works. Unless therefore it can be shown that the appellant by doing something to the motor which he was not entitled to do dishonestly misappropriated or converted the motor to his own use, he cannot be guilty of breach of trust under this part of section 405. Now the case of the Works is that the appellant must be deemed to have misappropriated or converted to his own use the motor by writing the letter of June 8th. It is clear however that the letter shows no change in the use of the motor, which, according to the Works, the appellant had hired for his own use. Therefore it cannot be said that merely by writing that letter of June 8, the appellant dealt with the motor in such manner as would amount to its misappropriation or conversion to his own use by him. Clearly the appellant was using the motor for his own purpose before that letter and continued to use it in the same way after the letter. That letter therefore cannot in our opinion result in the misappropriation or conversion of the motor to his own use by the appellant within the meaning of these words in section 405 in the circumstances of the present case. It is however urged that even if that be so, the appellant must be held to have dishonestly used or disposed of the motor in violation of the legal contract, express or implied, which he had made touching the discharge of such trust, because of the letter of June 8. Now it is clear from the receipt given by the appellant to the Works when he took the motor in April 1958 that he was taking it for his own use on certain terms. There is however nothing to show that by writing the letter of June 8 the appellant used the motor in violation of any legal contract, express or implied, which he bad made with respect to it for use of the motor was the same before the letter as well as after it. Nor can it be 402 said that the appellant had disposed of the motor in violation of any legal contract which he had made with respect thereto for it is not the case of the Works that the appellant had parted with the possession of the motor to somebody else. If, for example, the appellant had sold that motor, there might have been something to be said for the view that he had disposed of the motor in violation of the contract with respect to it even if it was a hirepurchase contract. But on the facts of this case all that the letter of June 8 does is to put forward the case of the appellant with respect to the transaction of April 4, 1958. So far as the use of the motor is concerned there has not been any change in it to indicate either misappropriation or conversion or disposal of it in any manner against the terms of the contract, express or implied. Clearly section 405 contemplates something being done with respect to the property which would indicate either misappropriation or conversion or its use or disposal in violation of the contract, express or implied. But where, as in the present case, nothing was done with respect to the use of the property which was not in accordance with the hiring agreement between the parties, it cannot be said that there was misappropriation or conversion of the property or its use or disposal in violation of the contract. We are not expressing any opinion as to the correctness of the case either of the appellant or of the Works in this behalf. All that we emphasise is that the letter of June 8 merely raises a ' dispute of civil nature between the parties and there is no question of any criminal breach of trust with respect to the motor on the basis of that letter. In this view of the matter we allow the appeal, set aside the conviction of the appellant and order his acquittal. The fine, if paid. will be refunded to him. Appeal allowed.

The appellant took an electric motor from an electrical Works in which the respondent was employed. Dispute arose about the terms on which the motor had been taken. The appellant wrote a letter to the Works that he had purchased the motor after paying its full price; on behalf of the works it was said that it had only been given on hire. The Works, through the respondent, filed a complaint against the appellant alleging breach of trust. The complaint was dismissed by the trying magistrate but in appeal under section 417(3) Criminal Procedure Code the High Court held that the claim of ownership made by the appellant in his letter was not bona fide and that by writing the said letter he had sought to cause wrongful gain to himself and wrongful loss to the works in violation of the entrustment, which made him guilty under section 406 of the Indian Penal Code. In appeal to the Supreme Court by special leave, HELD:The appeal must succeed. Clearly section 405 contemplates something being done with respect to the property which would indicate either misappropriation or conversion to the offender 's own use, or its use or disposal in violation of the contract express or implied. But when as in the present case nothing was done with respect to the use of the property which was not in accordance with the hiring agreement between the parties it cannot be said there was misappropriation or conversion of the property or its use or disposal in violation of the contract. The appellant did not part with the possession of the motor to any body else; he put it to his own use the purpose for which he had taken it. The use of the motor remained the same after the letter in question as before it. The said letter merely raised a dispute of a civil nature between the parties and there was no question of any criminal breach of trust punishable under section 406 with respect to the matter on the basis of that letter. [401 D F; 402 E]

Appeal No. 200 of 1960. Appeal from the Judgment and Order dated the 19th March, 1959, of the Mysore High Court, Bangalore, in Writ Petition No. 263 of 1957. K.Srinivasan and R. Gopalakrishnan, for the appellant. A. N. Kirpal and D. Gupta, for the respondent. December 5. The Judgment of the Court was delivered by SHAH, J. This appeal with certificate of fitness granted by the High Court of Judicature of Mysore is from an order rejecting the petition of the appellant for a writ to quash a notice of reassessment under section 34 of the Indian Income Tax Act. The appellants are a Hindu Undivided Family carrying on business in groundnuts and other commodities at Goribidnur, Kolar District, in the territory which formed part of the former State of Mysore. The Mysore Income Tax Act was repealed and the Indian ' Income Tax Act was brought into force in the Part B State of Mysore as from April 1, 1950. The appellants had adopted as their year of; account July 1 to June 30 of the succeeding year and they were assessed under the Mysore Income Tax Act on that footing for the year of assessment 1949 50 corresponding to the year of account July 1, 1948,to June 30, 1949. After the Indian Income Tax Act was applied to the State of Mysore on December 26, 1950, notice under section 22(2) of the Indian Income Tax Act was served upon the appellants requiring them to submit their 913 return of income for the assessment year 1950 51. On September 8, 1952, the appellants submitted their return stating that for the year ending June 30, 1949, corresponding to the assessment year 1949 50, they were assessed under the Mysore Income Tax Act, that their income for the year ending June 30, 1950, was assessable under the Indian Income Tax Act in the assessment year 1951 52 and that they had no assessable income for the assessment year 1950 51. The Income Tax Officer passed on that return an order "no proceeding" and closed the assessment. For the assessment year 1951 52, the appellants submitted their return of income. In the books of account produced by the appellants an opening cash credit balance of Rs. 1,87,000 odd on July 1, 1949, was disclosed. The Income Tax Officer called upon the appellants to produce their books of account of previous years, but the books were not produced on the plea that the same were lost. In assessing the income of the appellants for the year of account 1949 50, the Income Tax Officer held that Rs. 1,37,000 out of the opening balance in the books of account dated July 1, 1949, represented income from an undisclosed source. In appeal, the Appellate Assistant Commissioner observed that the appellants not having exercised their option under section 2(ii) of the Indian Income Tax Act, and in the absence "of any system of accounting adopted" by them, the only course open to the Income Tax Officer was to take the financial year ending March 31, 1950, as the previous year for the income from an undisclosed source, and directed the Income Tax Officer to consider this credit in the assessment for the year 1950 51 after giving opportunity to the appellants to explain the nature and source thereof. Before the appeal was disposed of by the Appellate Assistant Commissioner, the appellants had submitted a fresh return for the assessment year 195051 purporting to do so under section 22(3) of the Indian Income Tax Act. Pursuant to the direction of the Appellate Assistant Commissioner, the Income Tax Officer issued a notice of reassessment under section 34 of the Income Tax Act and served it on October 15, 1957, 914 calling upon the appellants to submit a fresh return. The appellants thereupon submitted a petition under article 226 of the Constitution to the High Court of Mysore praying for an order declaring that the notice under section 34 was without jurisdiction and for quashing the notice and proceeding consequent thereon. This petition was dismissed by the High Court, but the High Court, on the application of the appellants, certified that the appeal was a fit one for appeal to this court. Section 34(1) of the Indian Income Tax Act at the relevant time in so far as it is material provided: "(1) If (a). the Income Tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to incometax have escaped assessment for that year, or (b). notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income Tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income tax have escaped assessment for any year, he may in cases falling under el. (a) at any time within eight years and in cases falling cl. (b) within four years of the end of that year, serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22 and may proceed to assess or reassess such income, profits or gains; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section. " In the course of the assessment proceedings for 1951 52, the appellants produced their books of account containing an entry dated July 1, 1949, showing an opening cash balance of Rs. 1,87,000 odd which was not satisfactorily explained. Though called upon, they did not produce their books of account for the earlier year. The appellants had failed to disclose in their return for the assessment year 1950 51 any 915 income. In the circumstances, the Income Tax Officer had reason to believe that by reason of failure on the part of the appellants to disclose fully and truly all ' material facts necessary for assessment for that year, income chargeable to tax had escaped assessment. The Income Tax Officer had therefore jurisdiction to issue the notice for reassessment. The submission that the previous return submitted on September 8, 1952, "had not been disposed of" and until the assessment pursuant to that return was made, no notice under section 34(1) for reassessment could be issued, has in our judgment no substance. The Income Tax Officer had disposed of the assessment proceeding accepting the submission made by the appellants that they had no income for the assessment year 1950 51. Under section 23(1) of the Indian Income Tax Act, it is open to the Income Tax Officer, if he is satisfied that the return made by an assessee under section 22 is correct, to assess the income and to determine the sum payable by the assessee on the basis of the return without requiring the presence of the assessee or production by him of any evidence. The appellants had in their return dated September 8, 1952, submitted that they had no assessable income for the year in question and on this return, the Income Tax Officer had passed the order "no, proceeding". Such an order in the circumstances of the case meant that the Income Tax Officer accepted the return and assessed the income as "nil". If thereafter, the Income Tax Officer had reason to believe that the appellants had failed to disclose fully and truly all material facts necessary for assessment for that year, it was open to him to issue a notice for reassessment. Under section 22, sub section (3), an assessee may submit a revised return if after he has furnished the return under sub section (2) he discovers any omission or wrong statement therein. But such a revised return can only be filed "at any time before the assessment is made" and not thereafter. The return dated February 26, 1957, was submitted after the assessment was made pursuant to the earlier return and it could not be entertained. Nor could the lodging of such a return 916 debar the Income Tax Officer from commencing a proceeding for reassessment of the appellant under section 34(1) of the Indian Income Tax Act. There is also no substance in the contention that for the assessment year 1950 51 the assessee could be assessed under the Mysore Income Tax Act and not under the Indian Income Tax Act. By the Finance Act XXV of 1950 section 13, cl. (1), it was provided in so far as it is material that: "If immediately before the 1st day of April, 1950, there is in force in any Part B State. any law relating to income tax or super tax or tax on profits of business, that law shall cease to have effect except for the purposes of the levy, assessment and collection of income tax and super tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income Tax Act, 1922 (XI of 1922), for the year ending on the 31st day of March, 1951, or for any subsequent year. " By virtue of section 13(1), the Mysore Income Tax Act ceased to be in operation as from April 1, 1950, except for the purposes of levy, assessment and collection of income tax and super tax in respect of any period which was not included in the previous year for the purposes of assessment under the Indian Income Tax Act for the assessment year 1950 51. The appellants had been assessed for the period July 1, 1948, to June 30, 1949, under the Mysore Income Tax Act. It is manifest that for any account year which was the previous year in relation to the assessment year 195051, the appellants were liable to be assessed under the Indian Income Tax Act and not under the repealed Act. The year of account July 1, 1949, to June 30, 1950, was not a period prior to such previous year and therefore liability to pay tax in respect of that period could be assessed not under the Mysore Income Tax Act, but under the Indian Income Tax Act. It was urged that this interpretation of section 13 may, when the account year of an assessee does not coincide with the financial year lead to double taxation of the income for the account year ending between April 1, 1949, 917 and March 31, 1950. But in order to avoid the contingency envisaged by the appellants, the Central Government has, in exercise of its power under section 60A of the Indian Income Tax Act, issued the Part B States (Taxation Concessions) Order, 1950, which by cl. 5(1) provides amongst other things, that the income, profits and gains of any previous year ending after the 31st day of March, 1949, which is a previous year for the State assessment year 1949 50 shall be assessed under the Act (Indian Income Tax Act, 1922) for the year ending on the 31st March, 1951, if and only if such income, profits and gains have not, before the appointed day, been assessed under the State law. If, in respect of the previous year for the purposes of the assessment year ending 31st March, 1951, the appellants had been assessed by any State Government under a law relating to income tax in force in the State, the Indian Income Tax authorities would be in competent to assess income for that year; but in default of such assessment income of the appellants for that year was assessable under the Indian Income Tax Act. The notice under section 34 was also not issued after the expiry of the period prescribed in that behalf. The notice was issued by the Income Tax Officer because he had reason to believe that by reason of failure on the part of the appellants to disclose fully and truly all material facts necessary for the assessment for the the year 1950 51, income had escaped assessment. Such a notice fell manifestly within section 34(1)(a) and could be issued within eight years, from the end of the year of assessment. The impugned notice under section 34 for reassessment of the income of the appellants for the year 1950 51 was, in our judgment, properly issued and the High Court was right in dismissing the petition for a writ to quash the notice. The appeal fails and is dismissed with costs.

The appellants, a Hindu undivided family, carrying on business in the former State of Mysore, were assessed under the Mysore Income tax Act for the year of assessment 1949 50 corresponding to the year of account July 1, 1948, to June 30, 1949. The Indian Income tax Act came into force in that area in April 1, 1950, and on December 26, 1950, notice under section 22(2) of that Act was served upon the appellants to submit their return for the assessment year 1950 51. On September 8, 1952, the appellants submitted their return stating that they had no assessable income for that year. The Income Tax Officer passed on that return an order, "no proceeding", and closed the assessment. When the appellants submitted their return for the next assessment year, their books of account disclosed an opening cash credit balance of Rs. 1,87,000 and odd on July 1. 1949. They failed to produce the books of account of the previous years, and the Income tax Officer held that Rs. 1,37,000 out of the said opening balance represented income from an undisclosed source. The appellants submitted a fresh return for the assessment year 1950 51 purporting to do so under section 22(3) of the Indian Incometax Act. Pursuant to the direction of the Appellate Assistant Commissioner, the Income Tax Officer on October 15, 1957, served on the appellants a notice under section 34 of the Act and thereupon the appellants moved the High Court under article 226 for an order quashing the said notice and the proceeding as without jurisdiction. The High Court dismissed the petition. Held, that it was not correct to say that the issue of the notice for reassessment was without jurisdiction as the assessment was yet pending. Under section 23(1) of the Indian Income tax Act, it is open to the Income tax Officer, if he is satisfied as to correctness of the return filed by the assessee, to assess the income and determine the sum payable on the basis of the return without requiring the assessee either to be present or to Produce evidence. The order 'no proceeding recorded on the. return must, therefore, mean that the Income Tax Officer bad accepted the previous return and assessed the income as nil. A revised return under section 22(3) filed by the assessee may be 912 entertained only before the order of assessment and not thereafter. Lodging of such a return after the assessment is no bar to reassessment under section 34(1) of the Act. It could not be said, having regard to the provisions of section 13(1) of the Finance Act (XXV of 1950) and cl. 5(1) of Part. B States (Taxation Concessions) Order 1950, issued by the Central Government under section 60A of the Indian Income tax Act, that for the assessment year 1950 51 the appellants were assessable under the Mysore Income tax Act and not under the Indian Income tax Act.

Appeals Nos. 221 & 222 of 1963. Appeals by special leave from the judgment and order dated April 16, 1959 of the Mysore High Court in Writ Petitions Nos. 138 and 139 of 1956. N. D. Kharkhanis and R. N. Sachthey, for the appellants (in both the appeals). K. Srinivasan and R. Gopalakrishnan, for the respondent (in the appeals). March 11, 1964. SARKAR J. and HIDAYATULLAH J. delivered separate opinions dismissing the appeals. SHAH J. delivered a dissenting opinion allowing the appeal. SARKAR J. The question in these two appeals is whether certain proceedings for the recovery of tax from the assessee under the Income tax Act, 1922, were invalid and should be quashed as the assessment order on which they were based had been revised in appeal. The High Court of Mysore held them to be invalid and quashed them. The revenue authorities have now appealed to this Court against that decision. I think it will be helpful to set out the facts chronologi cally. The tax sought to be realise a became due under two assessment orders passed by an Income tax Officer on March 23, 1955, in respect of the years 1953 54 and 1954 55 finding that the assessee 's income for the earlier year was Rs. 61,000/ on which a tax of Rs. 19,808 1 0 was due and that for the other year was Rs. 1,21,000/ creating a tax liability of Rs. 66,601 3 0. Notices of demand under section 29 of the Act were issued in respect of these dues. The assessee tiled appeals to the Appellate Assistant Commissioner against the assessment orders but did not pay the tax as demanded by the notices. On such failure to pay, the Income tax Officer sometime in September 1955 sent certificates to the Deputy Commissioner, Kolar under section 46(2) of the Act for recovery of the tax as arrears of land revenue and the latter in the course of the same month attached various properties of the assessee under the Revenue Recovery Act. Thereafter on December 17, 1955, the appeals filed by the assessee which were till then pending were decided by the Appellate Commissioner. He reduced the assessable income of the assessee to Rs. 27,000/ for the year 1953 54 and to Rs. 45,000/ for the year 1954 55 and directed the Income tax Officer to recompute the tax on the basis of the reduced income and to refund the excess if any collected. It appears that thereafter on February 19, 1956, the Income tax Officer informed the assessee that his tax liability for 1953 54 150 had reduced to Rs. 4,215 9 0 Rs. 13,346 8 0 and called upon him to pay these amounts at once into the local treasury. The assessee filed further appeals against the orders of the Appellate Commissioner and asked that the recovery proceedings might be stayed pending decision of these appeals and on that request being rejected, moved the High Court of Mysore by two petitions under article 226 of the Constitution for quashing the recovery proceedings as invalid with the result earlier mentioned. We are not concerned with the appeals filed by the assessee from the appellate orders and no further reference to them will be made in this judgment. The contention of the assessee is that in view of the orders of the Appellate Commissioner the earlier orders, notices of demand and certificates must be deemed to have been super seded and the attachments therefore ceased to be effective from the date of the appellate orders and could no longer be proceeded with. He contends that the Income tax Officer had to start afresh by serving a new notice of demand and taking the necessary further steps thereon for realisation of the tax which then was due only under the appellate orders. These contentions were accepted by the High Court. The revenue authorities on the other hand, contend in short that the Act does not provide for any such supersession. Now, the scheme of the Income tax Act for realisation of moneys becoming due under it appears to be this. The tax becomes due on the making of an assessment order or an order imposing penalty or requiring interest to be paid. There after a notice of demand in respect of that amount has to, be served. This is provided by section 29 which is set out below: section 29. When any tax, penalty or interest is due in consequence of any order passed under or in pursuance of this Act, the Income tax Officer shall serve upon the assessee or other person liable to pay such tax, penalty or interest a notice of demand in the prescribed form specifying the sum so payable. The form mentioned contains directions as to the time within which, the person to whom and the place at which the payment is to be made. The consequences that follow a non compliance with a notice of demand served under section 29 are set out in section 45 which so far as material is in the following terms: Section 45. Any amount specified as payable in a notice of demand under sub section (3) of section 23A or under section 29 or an order under section 31 or section 33, shall be paid within the time, at the place and to the person mentioned in the 151 notice or order, of if a time is not so mentioned then on or before the first day of the second month following the date of the service of the A notice or order, and any assessee failing so to pay,,, shall be deemed to be in default, provided that when an assessee has presented an appeal under section 30, the Income tax Officer may in his dis cretion treat the assessee as not being in default as, long as such appeal is undisposed of. It will be noticed that this section is not confined to the effect of a failure to comply with the terms of a notice of demand issued under section 29 but makes the same consequence arise on the failure to carry out the terms of a notice under section 23A(3) and orders under sections 31 and 33. That consequence is that the assessee is to be deemed to be in default. It is after an assessee is so in default that coercive processes for realisation of the amount due start. Provision for this is made in section 46 to which I will immediately come. Before doing so, however, I wish to observe that section 45 gives an Income tax Officer on an appeal being filed, a discretion to treat an assessee as not in default. An argument has been founded on this aspect of the section and to it I will later refer. Passing on now to section 46, it will be enough for the purposes of these appeals to refer only to sub section (2) of that section. This provides that "The Income tax Officer may forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee, and the Collector on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue. " It was under this provision that in the present case the Income tax Officer sent the certificates to the Deputy Commissioner and the latter effected the attachment thereafter under the Revenue Recovery Act. Now there is no dispute that all steps taken in the present case by the revenue authorities were valid when taken for the appellate orders had not till then been made. The only question is as to the effect of the appellate orders. It is contended on behalf of the revenue authorities that the Act does not provide that the consequences of a default incurred under the Act cease to be available to the revenue authorities for realisation of the amount due in case the order which was the basis of the default was later revised in appeal. It is, therefore, said that those consequences are not affected by the revision of the order except where it is annulled and hence all notices and attachments remain in force and can be acted upon for recovering the tax due. I am unable to agree with this proposition. It may be that the Act contains no express provision stating what would 152 happen which it was incurred was later revised in appeal. But within there is enough in the Act to indicate that in some of these cases at least the default comes to an end. If it does, it seems to me to follow inevitably that the consequences of the default also disappear. I would first refer to section 45 which says that when an order under section 31 specifies an amount as payable and the amount is not paid within the time, at the place and to the person mentionect in the order or where no time is mentioned in it, within the time specified in the section itself, the assessee so failing to pay shall be deemed to be in default. The order under section 31 is an order by the Appellate Commissioner. If lie specifies an amount as payable in his order and mentions the time when, the place where and the person to whom the payment is to be made, then noncompliance with that order would create a, default. Now this order is made in an appeal from an order made by the Income tax Officer. Suppose there is already a default as a result of non compliance with a, notice under section 29 given in respect of the Income tax Officer 's order. As clearly there could not be two defaults for there was one liability, the Act must in such a case be taken to have provided by necessary implication that the default incurred as a result of non compliance with the notice to pay the amount mentioned in the Income tax Officer 's order must be deemed to have been superseded by the appellate order. The contention that the Act does not contemplate a default ceasing to be so except when an assessment order is annulled by the appellate order, is, therefore, unfounded. Take another case. Suppose the appellate order says only that a different amount from that mentioned in the Income tax Officer 's order shall be payable on income for a certain period without specifying the person to whom or the place where it is to be paid. The effect of it must be to wipe out the Income tax Officer 's order since the two cannot exist together. In such a case along with the superseded order the default if any incurred in connection with it must also disappear. There will have to be a fresh notice under section 29 in respect of the amount due under the appellate order on breach of which a fresh default may arise. It was, however, said that the Act nowhere requires the appellate order to state the amount payable or to specify the time when, the place where and the person to whom it is to be paid. That may be so but that does not affect what I have said. Section 45 clearly contemplates the appellate order setting out these things and there is nothing in the Act to prevent the Appellate Commissioner from setting them out. Since section 45 cannot be read as contemplating an impossibility, it must be held that the Appellate Commissioner may in his order specify the amount payable and state the other particulars about time of 153 payment etc. If he can do so, that would be enough for my present purpose and it is not necessary for it that the Act must in every case require him to do so. In case where the appellate order specifies an amount as payable, the Income tax officer 's order must be deemed to have been superseded. One other argument to which I have to refer at this stage is that if the assessee 's contention be correct, then the discretion given to the Income tax Officer by section 45 not to treat an assessee in default becomes infructuous for then in every case on the making of the appellate order the default earlier incurred must disappear. This does not seem to me to put the position accurately. It is not in dispute that the filing of an appeal does not stay the operation of the original order. So if before the appellate order is made, the amount due is realised by the coercive process following the default, then those steps do not become invalid. There may be a, liability to refund but none the less what was done was legal when done. Again it would, in my view, depend on the terms of the appellate order whether the earlier default was wiped out or not. If, for example, the appellate order confirms the original order, then the default already incurred may not be affected. In both these cases the discretion to treat the assessee as a defaulter was effectively exercised. The argument that the acceptance of the assessee 's contention would render part of section 45 nugatory and should, therefore, not be accepted, is in my opinion unsound. How then does the matter stand? It seems to me that the crux of it is the effect of the appellate order on the original order. If the original order has been destroyed or replaced by the appellate order, then the notice of demand and all other steps based upon the original order must be deemed to have become ineffective. In such a case the default earlier incurred must be taken to have disappeared and cannot support further action for recovery of any tax. Now the general proposition is that an original order merges in the appellate order: cp. Madan Gopal Rungta vs Secretary to the Government of Orissa(1). But in the present case, it is not necessary to rely on that proposition. Section 31(3) of the Act seems to me to make express provision on the subject. It states that in the case of an appeal from an order of assessment, which is the kind of order with which we are now concerned, the Appellate Commissioner may "(a) confirm, reduce, or enhance or annul the assessment, or (b) set aside the assessment and direct the Income tax Officer to make a fresh assessment after making such further enquiry as the Income tax Officer thinks fit or the Appellate Assistant Commissioner may direct, and the Income tax Officer shall thereupon proceed (1) [1962] Suppl. 3 S.C.R. 906. 154 to make such fresh assessment and determine where necessary the amount of tax payable on the basis of such fresh assess ment. " There will, of course, be no occasion to determine the amount of the tax payable on the basis of the fresh assessment if the income on that assessment appears to be below the taxable level. I will consider the various orders contemplated by section 31(3)(a) & (b) and their effect. It may be that when an appellate order confirms the original order, the default earlier incurred and all steps taken pursuant thereto remain unaffected, for such an order may maintain intact the original order. Now it is not in dispute that when the appellate order annuls the earlier order, the default disappears. It is said that that is because the debt ceases to exist. I do not quite follow this. It has never been questioned that the debt becomes due when demand is made under section 29 and section 45 of the Act: see Doorga Prosad Chamaria vs Secretary of State(1). Therefore if a debt is to cease to exist it must be because the source from which it sprang, namely, the original order, has been annihilated by the appellate order annulling it. In fact section 31(3)(a) contemplates an annulment of the original assessment order itself; the demand under section 29 or section 45 is not annulled directly by it. Therefore, in the case of an order of annulment under section 31 the original order of assessment is itself destroyed. If it disappears, I cannot conceive the default based on it continuing in force. Likewise, where under cl. (b) of section 31(3) the appellate order sets aside the assessment, the same result must clearly follow. There is not much difference between annulling an order and setting it aside; both wipe out 'the original order. I now come to an appellate order enhancing the assessment. With regard to it, it has not been disputed that a fresh notice of demand must issue. If this notice has to be in respect of the entire amount, then clearly the default earlier incurred for the smaller amount found due by the original order must have gone for the liability was one and there could not be two defaults in respect of it. But it was said that the notice has to be issued in respect of the enhanced amount only. Indeed in some of the cases cited at the bar it has been so said. I have very grave doubts about the correctness of this view. The notice of demand can only issue in respect of the amount due in consequence of an order. Unless, therefore, the appellate order specifies only the enhanced amount as due I do not see how a notice in respect of that amount can be issued under section 29. The appellate order has to specify an amount due. If it specifies the entire amount due including the enhancement, then it cannot be said that under it the amount of the enhancement only is due and no notice demanding such an amount (1) 72 I.A. 114. 155 only under section 29 can be issued. If the appellate order specifies only the amount of the enhancement, it will be making an. additional or supplementary assessment. Apart from section 34 of the Act with which we are not now concerned, I am not aware,. of any other provision which permits such an assessment. In any case section 31(3)(a) does not seem to me to contemplate it. Therefore, in my view when an order of enhancement of assessment is made under section 31 the notice must be in respect of the entire amount and in such a case the earlier notice issued in respect of original order must be deemed to have been superseded. But assume I am wrong in this. Assume that an appellate order of enhancement may be confined to the amount of the enhancement only. Even so I am wholly unable to agree that the appellate order cannot specify the entire enhanced amount due. There is nothing in the Act to prevent this being done. When this is done then at least the original order and the notice must be deemed to have been put out of existence along with the default arising from the non compliance with the latter and all its consequences. That leaves only the case of an appellate order reducing the amount. It seems to me that it would be somewhat curious if in all other cases excepting the case of a confirmation, the appellate order destroys the original order it does not do so in the case of a reduction. An order confirming may be different for it confirms and, therefore, does not destroy. It has, however, been said that "if subsequently the demand is modified on appeal and the amount of the tax payable is reduced, all that happens is that the liability sought to be imposed by the notice of demand, in respect of the amount by which the assessment is reduced is found to have never been a liability at all but the liability in respect of the remainder which stands unaffected by the appellate order remains" and also that "where a notice of the demand has, in fact, been issued in respect of a larger amount as determined by the assessment order, it has been issued even in respect of the smaller amount which is ultimately found to be the tax properly payable. That being so, the assessee was under an obligation to pay it by the date fixed and if he did not pay it by that date, he became a, defaulter": see Ladthuram Taparia vs D. K. Ghosh and Ors.(1) With great respect I am unable to accede to this proposition and the conclusion based thereon that the default and its conse quences continue even after the appellate order reducing the original assessment. How does the assessee know before the appellate order the smaller amount which he might ultimately be liable to pay? It would be curious if he did not know what he had to pay and could still have defaulted in paying it. (1) , 423, 424. 156 The order of reduction must, in my opinion, necessarily have the effect of setting aside the original order as a whole. It does not simply strike out a few of the figures appearing in the original order. That would really be a case of rectification for which provision is made in section 35 of the Act. What an appellate order does in a case of reduction is, as in the present case, to go into all the figures and arrive afresh at the assessable income which replaces the amount of the income arrived at by the Income tax Officer. Therefore it seems to me that in all cases of an appellate order reducing the assessment the original order goes and if it goes, of course the notice of demand also falls to the ground and the default based thereupon also ceases to be default anymore. Suppose the appellate order itself stated that a smaller amount of tax was payable after it had reduced the figure of the assessable income at which the Income tax Officer had arrived. Indeed I cannot imagine how else it can be expressed. After such an order the original order must go for the debt being one the two cannot exist together. If that order goes, all default arising out of it must also go. Therefore I think that on the Income tax Officer 's order being revised in appeal, the default based on it and all consequential proceedings must be taken to have been superseded and fresh proceedings have to be started to realise the dues as found by the revised order. Coming now to the present case, in view of the order made in it, it seems to me impossible to contend that the original default continued. What happened in the present case was that on December 17, 1955 the Appellate Commissioner reduced the assessable income of the assessee as found by the Income tax Officer by a large sum and directed him to recom pute the tax due on the basis of the assessable income stated in the appellate order. The assessee was not informed about the recomputed amount of tax till February 14, 1956. The assessee had not paid the tax mentioned in the Income tax Officer 's order. If he had done that then he would under the express terms of the appellate order have become entitled to a refund. What then was the position between these two dates? If the revenue authorities are right, then the assessee continued to be in default even after the appellate order. But what was the amount in respect of which he was so in default? Clearly he could not have continued to be in default in respect of the amount found due by the Income tax Officer in his original order for that amount was no longer due. He could not have been in default in respect of the amount which was found due on recomputation by the Income tax Officer according to the direction of the Appellate Commissioner because be did not know that amount. It would be absurd if the Act contemplated a default without the assessee knowing the amount in respect of which the default occurred and without his having a chance 157 to pay it. It would be impossible to construe the in a way to produce that result. It has, therefore, to be held that between the date of the appellate order and the communication of the recomputed amount of the tax to the assessee by the Income tax Officer there could be no default. Since the, Act does not provide for a default being in suspension for a period it must be held that the original default ceased to exist after the appellate order was made. Proceedings initiated on the original ,default before the appellate order could not, therefore, be continued any more. Indeed the appellate order superseded the original order and its consequences. If the effect of an appellate order reducing the assessment as in the present case did not wipe out the original order, a most anomalous situation would, in my view, arise. Under section 46(1) of the Act after a default has been committed in terms of section 45(1) the Income tax Officer may impose a penalty not ,exceeding the amount of the tax due in respect of which the default has occurred. This penalty may be recovered in the ,same way as the tax due, that is to say, by a notice under section 29 and thereafter by a certificate issued under section 46(2). Now suppose the penalty for the full amount of the tax found due by the Income tax Officer has been imposed and thereafter the appellate order reduces the amount of the tax. What happens to the order of penalty then? Obviously it does not automatically stand reduced to the reduced amount of the tax. It would again be absurd if the penalty could be recovered for the full ,original amount. The only sensible view to take in such a case would be that the order of penalty falls to the ground and the only logical way to support that conclusion would be to say that the original default has disappeared. For these reasons I have come to the conclusion that the decision of the High Court was right and I would, therefore, dismiss the appeals. HIDAYATULLAH, J. These appeals by special leave arise from a common order in two writ petitions under article 226 of the Constitution passed by the High Court of Mysore on April 16, 1959. The Income tax Officer, Kolar and the Commissioner of Income tax, Bangalore are the appellants before us. The assessee Seghu Buchiah Setty, who is the respondent, is a merchant of Srinivaspur, Kolar District. The appeals relate to the assessment years 1953 54 and 1954 55 in respect of which assessments were made under section 23(4) of the Incometax Act. For the assessment year 1953 54, the assessee 's income was estimated to be Rs. 61,000/ and the tax levied was Rs. 19,808 1 0. For the second year, his income was estimated to be Rs. 1,21,000 and the tax levied was Rs. 66,601 3 0. The assessee applied under section 27 of the Income tax Act for the cancellation of these assessments but his applications were 158 rejected. It was stated before us that other proceedings were pending in this behalf; but I am not concerned with them except in so far as a preliminary objection based on those and some other proceedings was made before us to which I shall refer presently. After the assessment was made, the Incometax Officer sent notices of demand asking the assessee to pay Rs. 86,409 4 0 as tax, and on default, issued a certificate under section 46(2) of the Act to the Collector of Kolar District to recover the amount as arrears of land revenue. On December 17, 1955, the Appellate Assistant Commissioner, "A" Range, Bangalore, before whom the assessments were challenged by appeal, passed his order and assessed the income for the two years to be Rs. 28,000/ and Rs. 46,000/ respectively. The Income tax Officer did not issue any fresh notices of demand under section 29 of the Act but wrote a letter demanding the reduced tax for the two years which now stood reduced to Rs. 4,215 9 0 and Rs. 13,346 8 0 respectively. It is significant that the reduction in the tax was from eighty six thousand rupees to seventeen thousand rupees. It appears that the assessee took further appeals to the Income tax Appellate Tribunal and the matter was said to be pending there. The assessee then applied to the High Court under article 226 of the Constitution for quashing the old certificates issued under section 46(2) by the Income tax Officer on the ground that as. no fresh notices of demand were issued against him in respect of the reduced tax, he was not in default. The High Court accepted this contention and the necessary writs quashing the proceedings were issued. After the decision of the High Court, fresh notices of demand for the reduced tax were issued to the assessee on May 8, 1959 and those proceedings were also pending. The preliminary objection which is based on the pendency of the other proceedings and particularly the last fact is really of great force, because these appeals do not now appear to serve any tangible purpose. However, the appeals were heard at length and I must express my decision on the point mooted before us. In these appeals, the Department contends that the original notices of demand issued in September 1955 had not become inoperative after the order of the Appellate Assistant Commissioner. The reason advanced is that there is nothing in the Income tax Act which requires that a fresh notice of demand must issue every time the amount of tax is reduced in appeal. It is pointed out that if a previous notice of demand is not complied with, the assessee becomes a defaulter and it is submitted that he continues to be a defaulter, in respect of the balance. It is however conceded that where the Appellate Assistant Commissioner increases the assessment, a fresh notice 159 of demand must issue. It is urged that proceedings for recovery which may have commenced are likely to become useless if, fresh notices were compulsory, and it is submitted that all that is necessary is to inform the assessee and the Collector by, letters what the reduced amount is and as the default still continues, the reduced amount can straightaway be realised on the old certificates and a refund can be ordered if excess amount has already been recovered. The assessee contends that the original notice of demand lapses and with it the default and the certificate, and that the Income tax Officer is bound to issue a fresh notice of demand. The High Court accepted the assessee 's contention following a decision of the Calcutta High Court in Metropolitan Structural Works Ltd. vs Union of India(1). The appellants contend that the true view of the law is contained in a later decision of the Calcutta High Court reported in Ladhuran Taparia vs D. K. Ghosh and others(2), where the earlier case was explained. The appellants rely further on The Municipal Board, Agra vs Commissioner of Income tax, United Provinces: No. 2(3), Auto Transport Union (Private) Ltd. vs Incometax Officer, Alwave(4) and Hiralal vs Income tax Officer(5) for support. in Metropolitan Structural Works Ltd. Gv. Union of India(1) there were successive demand notices after the Appellate Assistant Commissioner and the Tribunal reduced the assessment and the Income tax Officer finally sent a certificate under section 46(2) of the Act. The assessee in that case, relying upon the seventh sub section of section 46, claimed that the proceedings were barred as according to it, the period of one year could only be calculated from the last day of the financial year in which demand was made and this could only be the first demand. It was contended by the assessee that the Act did not provide that a fresh notice should issue after revision of assessment, though it was admitted that there was no prohibition. Chakravartti, C. J. and Lahiri, J. observed: "The real point, however, is whether a second or a third notice of demand is at all permissible under section 29, even when an assessment is altered in a first or a second appeal. It appears to me that the necessity of issuing a fresh notice of demand in such circumstances is beyond argument." (Italics supplied) (1) (1) (3) (4) (5) 160 The learned Chief Justice gave illustrations of those cases which the earlier notice becomes "inappropriate". Addressing. himself to the necessity of a new notice, the learned Chief Justice observed: "In my view the answer to that could only be in the affirmative." (Italics supplied) The difference between the words 'in consequence of any order ' used in the Act and 'in consequence of any assessment order in pursuance of this Act ' which, he pointed out, could have easily been used, was next stressed and he held that the orders of the Appellate Assistant Commissioner and the Tribunal answered the former description. He expressed his conclusion thus: "If so, when there is some tax due in consequence of an order passed by the Appellate Assistant Commissioner or in consequence of an order passed by the Appellate Tribunal, a clear occasion arise& under the words of the section to serve a notice of demand upon the assessee. That such fresh notice should be issued when the assessment is altered is but common sense and I see no reason to construe the section against reason and against the actual necessities of realisation. " In the next case, Ladhuram Taparia vs D. K. Ghosh and others(1) the facts were the converse. There a demand notice was issued and then the tax was reduced. The assessee contended that there should be a fresh notice of demand before he was deemed to be in default. Chakravartti, C. J. and Das, Gupta, J. held that on reduction of assessment nothing further was required beyond an intimation to the assessee and the. Collector of the reduction of the tax. The reason given was that the demand in respect of the excess stood 'eliminated ' and the demand for the balance remained. It was held that a case of enhancement was different and it needed a fresh notice of demand. It was however not pointed out whether the fresh demand should be for the excess amount or the whole of the amount. Nor was it shown why a letter to the assessee and the Collector would not do in that case also. In either case, speaking arithmetically, a portion of the demand is saved, but speak ing legally, the demand notice, to quote the words of the earlier judgment, 'becomes inappropriate '. Whether the learned Chief Justice was right on the first occasion or on the second can only be said after discussing the relative sections of the Income tax Act, but this much must 161 say (and I say it with considerable hesitation and diffidence since I have always held the learned Chief Justice in high esteem) that he has not been able to get clear of the words used by him on the earlier occasion. It seems anomalous that if the tax is increased from Rs. 10,000/ to Rs. 10,010/ a fresh notice of demand must go, that is to say the earlier default is wiped off; but if it is reduced from Rs. 10,010/ to Rs. 10 / a fresh notice is not required and the assessee must be deemed to be in default for Rs. 10 with all the evil consequences of default because he did not pay an extra ten thousand rupees with the ten rupees. But it may be said, there is no room for logic and mathematics if the Act so requires and the true answer can only be furnished by what the law requires. Before dealing with the pertinent sections to determine how the matter stands there, I may say that the other cases of the other High Courts cited earlier do not add to the discussion, but mention must be made of The Municipal Board Agra vs Commissioner of Income tax, United Provinces: No. 2(1). In that case, though a fresh notice of demand was served after reduction of tax under section 35 of the Income tax Act, calculation of limitation from the date of service of that notice was not allowed because the clauses relating to right of appeal, period of limitation etc. were pencilled through. The reason given was that section 35(4) makes it compulsory to serve a notice of demand only when there is enhancement and as no fresh notice is made compulsory when the tax is reduced, none need issue. An assessee might, on such construction, lose his limitation for appeal in a case under section 27 of the Income tax Act even before the order under section 27 determining the amount of tax is passed. It is contended that there is no provision that a second or third notice of demand must issue. There is no need that the Act must expressly authorise the issue of fresh notices of demand. Even if such a power is not expressly included, it flows from section 14 of the General Clauses Act under which a power can be exercised as often as the occasion demands. I am, however, of the opinion, that (except in cases of demnin is) the Act does contemplate, that a fresh notice of demand shall issue. There are two reasons for it. The first is the language of section 29 and the other is the consequences following the issuance of a notice of demand. I shall deal first with the second ground. After the demand is made, the tax, penalty and interest become a debt due to the Government. This was decided a long time ago by the Privy Council in Doorga Prasad vs Secretary of State(2). Further, by issuing a notice of demand, the (1) (2) at 289. L/P(D)1SCT 6 162 period of limitation for appeals under section 30 of the Act starts in many cases. Further still, when the notice of demand is not complied with, the assessee can be treated as a person in default and he is liable to pay a penalty equal to the tax debt under section 46(1) of the Income tax Act. Lastly, on the failure of the assessee to pay after a notice of demand is issued, the recovery proceedings can be started within a time limit and the amount of tax can be treated as an arrear of land revenue. It follows, therefore, that the notice of demand is a vital document in many respects. Disobedience to it makes the assessee a defaulter. It is a condition precedent to the treatment of the tax as an arrear of land revenue. It is the starting point of limitation in two ways and the breach of obedience to the notice of demand draws a heavy penalty. The notice of demand which is issued must be in a form prescribed by r. 20 and the form includes the following particulars: it shows the amount which has to be paid and indicates the person to whom, the place where and the time within which it has to be so paid. Compare with it section 45 of the Income tax Act which provides: "Any amount specified as payable in a notice of demand. under section 29 or an order under section 31 or section 33 shall be paid within the time, at the place and to the person mentioned in the notice or order, or if a time is not so mentioned, then on or before the first day of the second month following the date of the service of the notice or order, and any assessee failing so to pay shall be deemed to be in default, provided that, when an assessee has presented an appeal under section 30, the Income tax Officer may in his discretion treat the assessee as not being in default as long as such appeal is undisposed of:" (Proviso and Explanation omitted). From this section, it follows that an assessee is deemed to be in default if he disobeys either a notice of demand under section 29 or an order under sections 31 and 33. The contents of the notice of demand may be included in these orders and the order then serves the purpose of a notice of demand as well. In both cases, if time is not mentioned, the assessee must pay the tax on or before the first day of the second month following the date of the service of the notice or order. Once a default is incurred, it continues and the filing of an appeal does not save the assessee from the default. The Income ,Lax Officer can start and continue the proceedings for recovery of the tax notwithstanding the filing of the appeal. It is however to be 163 seen that he has been given the power to treat the assessee as not in default as long as the appeal is undisposed of. This power is conferred, because section 46(1) provides: "When an assessee is in default in making a payment. of income tax, the Income tax Officer may in his discretion direct that, a sum not exceeding that amount shall be recovered from the assessee by way of penalty. " To save an assessee from penalty, the Income tax Officer may treat him as not in default but if he does not, he is within his rights. Now take a case in which an assessee is considered to be in default after it notice of demand is served. Assume that the tax which is due is Rs. 10,010. The Income tax Officer, can, in his discretion, add another Rs. 10,010 by way of penalty and issue a certificate against him for recovery as arrears of land revenue of a sum of Rs. 20,020. Suppose the assessment is then reduced and his tax liability is found to be Rs. 10. To say that the old proceedings for the recovery of Rs. 20,020 can still be pursued in respect of Rs. 20 and the petty amount recovered as arrears of land revenue, when, if a notice of demand for Rs. 10 were sent the assessee would have paid the sum readily, is to make the law operate very harshly with out any advantage. To say again that the assessee whose tax is enhanced must receive a fresh notice of demand because the old notice becomes inappropriate is to make the lot of a person whose tax is reduced worse than that of a person whose tax is increased. At least the contumacy of the latter is the same if not greater than that of the former. It is said that all that is necessary is that the Income tax Officer should write a letter informing the assessee that the tax is reduced from Rs. 10,010 to Rs. 10. The question is, why not send him a fresh notice of demand? If there is no provision in the Income tax Act to send a fresh notice there is none authorising the sending of letters. No doubt, the old proceedings for recovery of the tax might become out of date and inappropriate, but it is one thing to use coercion to recover an amount which the assessee did not but probably could not pay, and another to recover an amount which the assessee could and would pay readily. However, if the law requires that a notice of demand need not go, that would be the end of the matter; but, in my opinion, section 29 in its terms is extremely clear and indicates that a notice of demand must always issue. It reads: "When any tax, penalty or interest is due in consequence of any order passed under or in pursuance of this Act, the Income tax Officer shall serve L/P (D) 1 SCI 6 upon the assessee or other person liable to pay such tax, penalty or interest a notice of demand in the prescribed form specifying the sum so payable." The learned Chief Justice of the Calcutta High Court, if may say respectfully, was perfectly right in pointing out its meaning in his first case. I cannot add to what he said and I adopt all lie said. But I would add a few words. The mandatory part of the section is quite clear. "The Income tax Officer shall serve a notice of demand upon the assessee" are emphatic words and the earlier part shows that he has to do it when tax is due in consequence of "any order". Any order means not only an order passed by himself, but also an order passed by reason of the success of an appeal which the assessee may file and in which the old assessment is set aside. In view of the consequences that ensue, it is clear to me that when an asssessment is gone through a second time and the amount of tax is reduced, the Income tax Officer must intimate to the assessee the reduced amount of tax and make a demand and give him an opportunity to pay before treating him as a defaulter. 'his is incumbent because the assessment resulting in the tax is itself set aside or modified and as assessee is entitled to a proper assessment and ascertainment of tax before a demand can be made on him. It is said that the Income tax Officer can send a letter but the law says that he 'shall serve upon the assesses a notice of demand in the prescribed form '. When the law requires that a notice of demand should issue, the mode of compliance by a letter is excluded. It may be that the letter is a good substitute for a notice of demand but the section demands that it should be 'in the prescribed form '. If a letter is to be written. why not a notice of demand? In other words, when the assessment is altered, whether it is reduced or it is increased, by reason of any order under the Act, it is the duty of the Income tax Officer to issue a notice of demand in the prescribed form and serve it upon the assessee. The learned Chief Justice of the Calcutta High Court clearly was of the view in the first case that there was only one answer to the question and I respectfully agree with him. He could only depart from his earlier view by finding fault with the drafting of section 45. 1 regret I can not agree with him there. Section 45 intends that the order of the Appellate Assistant Commissioner and the Tribunal may in some cases also serve as notices of demand. Further it is not clear from the later decision whether on the enhancement of the tax, a fresh notice of demand is required for the excess only or for the whole of the sum. That answer is not furnished in any of the other cases to which reference was made at the bar. If default is saved in respect of the reduced amount a 165 165 default would also be saved in respect of the original amount when the demand is increased. If a notice of demand were to issue in respect of the excess only, there will be two notices of demand and two starting points of limitation, both for the purpose of coercive action under section 46(7) as well as for purposes of any appeal that might lie. If, however, a fresh notice of demand is to go in respect of the composite sum, the question to ask would be, what happens to the default which was incurred already '? How does it disappear? In my opinion, there is only one possible answer and it was given by the learned Chief Justice in the earlier case. I would therefore dismiss these appeals and all the more readily because a fresh notice of demand has issued in this case. If it is disobeyed, the Income tax Officer would be able to recall the old certificate issued to the Revenue Officer, amend it and bring it in line with the tax now demandable and return it to him for continuing the recovery proceedings. I would dismiss the appeals but in the circumstances of the case, I would make no order about costs. SHAH, J. The Income tax Officer, Kolar Circle, Kolar, assessed Seghu Buchiah Setty respondent in this appeal to income tax under section 23(4) of the Indian Income tax Act, 1922 for the year 1953 54 on an estimated income of Rs. 61,000 and for the year 1954 55 on an estimated income of Rs. 1,21,000 and served notices of demand under section 29 of the Act for the tax due under the two orders of assessment. On the respondent failing to comply with the notices of demand within the period specified, the Income tax Officer treated the respondent as in default and sent certificates under section 46(2) of the Act to the Deputy Commissioner, Kolar, for recovery of the tax determined by the orders of assessment. The Deputy Commissioner attached certain properties belonging to the respondent. In appeals filed by the respondent against the orders of assessment the Appellate Assistant Commissioner reduced the income assessed for the year 1953 54 to Rs. 28,000 and for the year 1954 55 to Rs. 46,000. The Income tax Officer did not issue fresh notices of demand pursuant to the modification in the orders of assessment made by the Appellate Assistant Commissioner, but by his letter dated February 14, 1956 informed the respondent that he had to pay tax as reduced by the appel late order. The respondent did not pay the amount of tax demanded, and applied to the High Court of Mysore under article 226 of the Constitution for a writ of certiorari quashing the certificates issued by the Income tax Officer treating him as in default and a writ of prohibition prohibiting the Income tax Officer from enforcing the certificates under section 46(2) of the Income tax Act. The High Court of Mysore relying upon the 166 judgment of the Calcutta High Court in Metropolitan Structural Works Ltd. vs Union of India(1) held that the In come tax Officer could not, without issuing fresh notices of demand, after the Appellate Assistant Commissioner of In come tax reduced the taxable income, setting out the tax payable by him for the two years in question, treat the respondent as a defaulter and that the proceedings of the Collector based on the certificates issued pursuant to the order of assessment by the Income tax Officer were illegal. Against the orders passed by the High Court, the Income tax Officer has appealed to this Court, with special leave. The question which falls to be determined in this appeal is about the legal effect of the reduction of the assessable income by the order of the Appellate Assistant Commissioner on the notices of demand previously issued by the Income tax Officer. The respondent contends that by the modifications made in the orders of assessment the notices of demand issued by the Income tax Officer must be deemed cancelled or superseded, and he cannot be regarded as in default, unless fresh notices of demand are issued by the Income tax Officer specifying the amount payable pursuant to the appellate order. The respondent says that there was at the material time no outstanding demand notice or order specifying the amount payable failure to comply with which may be regarded as constituting a default. The respondent strongly relies upon the observations made by Chakravartti, C. J., in his judgment in Metropolitan Structural Works Ltd 's case(1) that where the income assessed by the Income tax Officer is reduced in appeal, the notice of demand issued by the Income tax Officer in respect of the income assessed by him will on such reduction cease to be appropriate, such being the meaning of the statute and any interpretation to the contrary is "against reason" ' and against the actual necessities of realization". The respondent therefore submits that an order of the, Appellate Assistant Commissioner in appeal not only super sedes the order of assessment against which the appeal is carried, but also the notice of demand issued by the Income tax Officer and all proceedings taken for recovery of tax in pursuance of the notice of demand, and therefore default which has resulted from the failure to comply with the notice of demand becomes inoperative, when the Appellate Assistant Commissioner passes his order in appeal against the order of assessment, whether such order is of confirmation or variance. The Income tax Officer may, submits the respondent, issue a certificate under section 46 if there be a fresh default resulting from non compliance of the order of the Appellate authority. If this submission is true, the demand notices must be issued and all ' (1) steps pursuant to an order of assessment for recovery must be completed before the appeal against the order of assessment is disposed of. If the proceedings are not completed, they will be superseded by the order passed by the appellate authority. We may examine the correctness of the plea raised by the respondent in the light of the scheme for recovery of tax, penalty or interest due under the provisions of the Act. After the income of an assessee is computed, and liability to pay tax, penalty or interest is determined in the manner provided by the Act, proceedings for recovery of the amount commence. A notice of demand is the foundation of such proceedings and of the jurisdiction to collect the tax. It is the notice of demand which converts the liability determined by the order of assessment into a debt due by the assessee to the State. There must therefore be a valid order of assessment, on which a notice of demand may be founded. Section 29 invests the Income tax Officer alone with jurisdiction to issue a notice of demand, and no other officer out of the hierarchy of Revenue Officers has that jurisdiction. It provides: "When any tax, penalty or interest is due in consequence of any order passed under or in pursuance of this Act, the Income tax Officer shall serve upon the assessee or other person liable to pay such tax, penalty or interest a notice in the prescribed from specifying the sum so payable. " The notice of demand has to be in the form prescribed under rule 20 which requires that the amount demanded, and the person to whom together with the place where it is to be paid, must be stated in the notice. Section 45 of the Act provides that the amount specified as payable in the notice of demand or an order under section 31 or section 33 shall be paid within the time, at the place and to the person mentioned therein, or if no time be so mentioned, then on or before the first day of the second month following the date of the service of the notice or order and if the assessee fails to pay the tax he shall be deemed to be in default, unless the assessee has presented an appeal 'under section 30 of the Income tax Act and the Income tax Officer in his discretion treats the assessee as not being in default as long as such appeal is undisposed of. Section 45 therefore prescribes the conditions under which a person may be treated as in default. Section 46 provides the mode and time of recovery of the amount due by an assessee. Sub sections (2) to (6) of section 46 lay down the method which may be adopted for recovery of the dues. Sub section (2) authorises the Income tax Officer to forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee. The Collector, on receipt of such certificate has to proceed to 168 recover from such assessee the amount specified therein as if it were an arrear of land revenue. Sub sections (3) to (6) deal with other modes of recovery. But resort to the modes of recovery is subject to sub section (7) which provides that save in accordance with the provisions of sub section (1) of section 42, or of the proviso to section 45, (which are for the purposes of this case not material) no proceedings for recovery of any sum payable under the Act shall be commenced after the expiration of one year from the last day of the financial year in which a demand is made under the Act. The Act therefore provides that if an assessee makes default in complying with the notice of demand or order under sections 31 or 33, proceedings may be taken in the manner provided in section 46 for recovery of the tax due but such proceedings shall not be commenced after the expiration of the period specified in sub section By the determination of tax under section 23, or imposition of penalty in circumstances mentioned in section 28, or liability for payment of interest in circumstances mentioned in section 18 A(4), (6), (7) or (8) obligation to pay tax, penalty or interest arises, and upon service of a notice of demand under section 29 or an order under section 31 or section 33, the tax, penalty or interest become due and payable, and if the tax is not paid within the time specified, the assessee must, unless the Income tax Officer otherwise directs, be treated as in default. Against the assessee in default, the Income tax Officer may take appropriate steps for recovery of tax as prescribed in cls. (2) to (6) of section 46. But the Legislature has not enacted that steps taken by the Income tax Officer for recovery of tax will lapse or be superseded when the appeal against the order of assessment passed by the Income tax Officer is disposed of by the appellate authority. Section 45 in terms provides that when an assessee is served with the notice of demand and has failed to comply with the notice, he shall, unless otherwise ordered, be deemed to be a defaulter. The Act provides a right of appeal against the order of assessment, but on the presentation of the appeal the power of the Income tax Officer to take steps for recovery of tax is not suspended. The Income tax Officer is obliged by the statute to issue a notice of demand for payment of tax, penalty or interest due in consequence of any order passed under or in pursuance of the Act. Lodging of an appeal does not operate as a stay and would not entitle the assessee to withhold payment of tax till the appeal is decided. The Income tax Officer may in his discretion treat the assessee as not in default as long as such appeal is not disposed of, but unless such an order is passed the assessee would, on failure to comply with the order, be a defaulter and proceedings for recovery of tax may be initiated and continued during the pendency of the appeal. 169 It is clear therefore that when tax, penalty or interest is determined and demanded, proceedings shall be commenced for recovery, and these proceedings may be commenced and continued, notwithstanding the presentation of an appeal. By failing to comply with the demand the assessee becomes a defaulter, and it is not provided that he shall cease to be a defaulter on the disposal by the appellate authority of the appeal against the order of assessment. In the absence of such a provision, it is difficult to perceive any ground for holding that the proceedings commenced against a defaulting tax payer for recovery of tax must be abandoned, and fresh proceedings commenced for recovery of tax pursuant to the order of the appellate authority. If on the passing of an order by the appellate authority, the notice of demand previously issued is deemed to be cancelled or superseded, an assessee must be treated as absolved from the consequences of his default even if the appellate authority confirms the order of the Income tax Officer, because the earlier default by the tax payer will in every case go by the board, and the proceedings must be commenced again after service of a fresh notice of demand. The discretion vested in the Income tax Officer to treat or not to treat an assessee pending appeal in default will, in all cases be valueless. The provisions of the Act do not indicate any such legislative intent and express enactment conferring upon the Incometax Officer, in his exercise of discretion, power not to treat a person who has preferred an appeal as a defaulter, contains strong indication to the contrary. Therefore, in my view a person who has failed to comply with a notice of demand would continue to be a defaulter notwithstanding the reduction of liability by order of the appellate authority. There would be only one exception to this rule i.e. when the order of assessment is wholly set aside. But that is not a real exception, for against the assessee no steps can be taken because there is no debt due by him. It was urged that a person can be said to be in default in payment of tax, when he fails to comply with a demand for a specific amount, and when the amount payable by him is reduced in appeal, he is no longer in default because he has had no opportunity to meet the reduced demand. But the status of a defaulter under the Act is a condition for initiation of proceedings for recovery, and by the reduction of liability in appeal the status is not altered. Even if the amount due is modified, the status persists, but the process for recovery will be adjusted according to the modified demand including the imposition of penalty under section 46(1). It is true that the Act contains no express provision which enables the Income tax Officer to modify the certificate which is issued to the Collector, but the absence of such a provision does not detract from 170 the duty of the Income tax Officer to give information to the recovering authority about the reduction in the liability for tax, penalty or interest made by the appellate authority and to request such authority to adjust his proceeding to the modified demand. Such a duty must necessarily be implied. An error in the certificate can always be clarified by an amendment and if that power be granted, there is no reason to suppose that a demand which is reduced because of subsequent events, such as modification of the assessment by the appellate authority, or payment made by the tax payer as directed by the notice of demand may not be enforced in a manner consistent with the outstanding demand. If in an appeal the Appellate Assistant Commissioner enhances the tax, the Income tax Officer may give intimation to the recovering authority about the enhanced demand. No fresh notice is contemplated to be given by the Act in the case either of reduction of assessment or enhancement. The plea that a fresh notice of demand may have to be issued when the assessment is enhanced is not warranted by the statute, and the argument that against the assessee two notices of demand may in certain cases be issued, failure to comply with which may make him doubly a defaulter has no valid basis. Counsel for the respondent urged that it is open to the Appellate Assistant Commissioner to specify by his order the time and place at which the tax determined by him is to be paid, and the person to whom it is to be paid. If the Appellate Assistant Commissioner does so specify the amount, the person to whom and the place at which the payment is to be made, the order of the Income tax Officer would be deemed to be superseded and it would be the duty of the assessee then to pay the tax determined pursuant to the order of the Appellate Authority after a fresh notice is served upon him and he cannot be deemed to be in default unless he has failed to comply with the directions of the Appellate Assistant Commissioner within the period prescribed by that order. Section 45 does undoubtedly refer to the amount specified in an order passed under section 31 which deals with the procedure and the power of the Appellate Assistant Commissioner hearing an appeal from the order of the Income tax Officer, and to the amount specified in an order under section 33 dealing with the procedure and the power of the Income tax Appellate Tribunal in appeal against the order of the Appellate Assistant Commissioner, and provides that default in payment of the amount so specified can only arise if it is not paid within the time at the place and to the person mentioned in the order under section 31 or section 33 or in the demand notice under section 29. But sections 31 & 33 do not provide that in making their respective orders the Appellate Assistant Commissioner and the Appellate Tribunal shall determine the 171 tax, penalty or interest, and shall also prescribe the time within which, the person to whom, and the place at which the amount specified shall be paid, and it would be difficult to accept the contention that the Legislature in enacting section 45 a provision relating to recovery of tax intended to provide that in exercise of the appellate powers, the Appellate Assistant Commissioner and the Income tax Tribunal shall comply with certain requirements. In certain exceptional cases such as those in which an appeal is filed only against the amount of tax determined under section 23 or against imposition of penalty under section 28 or against orders specifying the amount of interest payable under section 18 A, the Appellate Assistant Commissioner or the Tribunal may, in their final orders, specify the amount to be paid and also the time within which and the place at which and the person to whom the amount is to be paid. Such a direction is intended only to effectuate in appropriate cases the order of the Appellate Assistant Commissioner or the Tribunal. It does not take the place of a notice of demand, but if made, may operate if not complied with to make the person liable to pay the amount specified a defaulter. An Appellate Assistant Commissioner may, in an appeal against the order of the Incometax Officer, either confirm the assessment or modify it by reducing or increasing it. Similarly the Tribunal may confirm the assessment of the Appellate Assistant Commissioner or may reduce the assessment. But the Appellate Assistant Commissioner and the Tribunal are not required by statute to specify the amount as payable in their order, nor are they required to direct payment to be made in their order. The Appellate Assistant Commissioner and the Tribunal have power to impose penalty in the conditions specified in cls. (a), (b) or (c) of sub section (1) of section 28 of the Income tax Act. But these orders are passed in exercise of their appellate jurisdiction conferred by sections 31 and 33 of the Act and where the Appellate Assistant Commissioner imposes penalty he may specify the amount thereof. Similarly the Tribunal imposing penalty may specify the amount of penalty. To such cases the provision relating to default arising on failure to comply with the direction to pay may apply if the person to whom, and the place at which, it is to be paid are specified. The assumption that section 45 of the Income tax Act requires the appellate authority to specify the amount payable in the order therefore seems to be unwarranted and the fact that under certain circumstances, having regard to the nature of the order appealed from, the appellate authority may specify in the order such particulars, does not justify the interpretation either that the Income tax Officer has the power to issue the notice of demand only in those cases where by inadvertence the Appellate Assistant. Commissioner or the Tribunal 172 have failed to specify the amount payable or superseding the notices for any provision orders by the Appellate Assistant Commissioner or the Tribunal deciding the appeal has the effect of superseding the notices of demand issued by the Income tax Officer. In the absence of any provision imposing an obligation upon the Income tax Officer to issue successive notices of demand from time to time for recovery of the amount due during the process of assessment, it must be held that the notices of demand issued by the Income tax Officer in exercise of the power under section 29 may be enforced in the manner provided by section 46 and within the period of limitation provided in cl. (7) of section 46, even after the appeal against the order of assessment by the Incometax Officer is disposed of, subject to adjustment of the amount to be recovered in the light of the order of the Appellate Assistant Commissioner. Observations made by Chakravartti, C. J., in the case in Metropolitan Structural Works Ltd 's case(1) do lend support, to the argument that the issue of a fresh notice on modification by the appellate authority was a "matter of reason" and "based on the actual necessities of realisation" and that it is obligatory upon the Income tax Officer to issue such a notice on every occasion when the assessment was modified. But the learned Chief Justice himself explained the observations in his judgment in Ladhuram Taparia vs D. K. Ghosh and others(2) and pointed out that in Metropolitan Structural Works Ltd 's case(1) the sole question which fell to be determined was as to the commencement of the period of limitation under section 46(7) for enforcement of a notice of demand when successive notices of demand were in fact issued by the Income tax Officer, and that the earlier judgment was not intended to lay down and did not lay down that the Income tax Officer was under an obligation to issue a fresh notice of demand merely because the Appellate Assistant Commissioner had modified the assessment. Chakravartti, C. J., after referring to the contention which was advanced and his observations regarding the necessity of issuing a fresh notice of demand where the earlier notice had become inappropriate by reason of reduction in the amount of the tax payable observed at p. 422: "To say that was not to say that a necessary modification of the demand could only be made by issuing a second notice under section 29 and could not be made in any other way, or to put it in other words. it was not to say that the necessity of issuing a fresh notice of demand was an invariable and imperative necessity (1) (2) I am altogether unable to see how that decision can be construed as having laid down that whenever an assessment order was modified by an appellate order, an obligation arose to issue a second notice of demand under section 29, if the,, modified amount was sought to be made payable and if it was sought to establish that a default in respect of the modified demand has been committed. " The observations of Chakravartti, C. J., in the Metropolitan Structural, Works Ltd 's case(1) relating to the necessity of issuing a fresh notice on the modification of the assessment were somewhat wide and literally read may support the argu ment advanced by the counsel for the respondent in this case, but they were, in my judgment, unnecessary for the purpose of deciding the case and did not correctly interpret the provisions of sections 29, 45 and 46. The view which has been expressed by Chakravartti, C. J., in Ladhuram Taparia 's case(2) has been adopted in other cases as well: Auto Transport Union (Private) Ltd. vs Income tax Officer, Alwaye (3) and Hiralal vs Income tax Officers and Mali Ram vs Collector Bhilwara (4). In my view the validity of a certificate issued under section 46(2) to the Collector for recovery of tax must depend upon the power of the Income tax Officer to issue that notice. That power may be exercised only if the assessee is a defaulter, and the proceedings are commenced within the period provided in section 46(7). If because of failure to comply with the notice of demand issued by the Income tax Officer the assessee is in default, I fail to appreciate how such a person can be regarded as not in default, merely because the order of assessment is modified but is not vacated. The High Court was, therefore, in error in holding that it was necessary to issue a fresh notice of demand, if the Appellate Assistant Commissioner modified the assessment so as to reduce the amount of tax due and unless such a notice was issued, the assessee could not be regarded as in default. The appeal will therefore be allowed and the petition filed by the respondent will stand dismissed with costs in this Court and the High Court. ORDER By order of the majority, the appeals are dismissed. But there will be no order as to costs. Appeals dismissed. (1) (2) (3)45 I.T.R. 103.

The respondent was assessed to income tax for the years, 1953 54 and 1954 55 on estimated incomes of Rs. 61,000/ and Rs. 1,21,000/ respectively and notices of demand under section 29 of the Indian Income tax Act, 1922, were served on him by the Income tax Officer for the tax due. On the respondent failing to comply with the notices of demand within the period specified, the Income tax Officer issued certificates under section 46(2) of the Act and sent them to the Collector for recovery of the tax, treating the respondent as in default. In appeals filed by the respondent against the orders of assessment, the Appellate Assistant Commissioner reduced the income assessed for the year 1953 54 to Rs. 28,000 and for the year 1954 55 to Rs. 46,000. The Income tax Officer did not issue fresh notices of demand pursuant to the modification in the orders of assessment made by the Appellate Assistant Commissioner, but by a letter informed the respondent that he had to pay tax as reduced by the appellate order, The respondent did not pay the amount of tax demanded, but applied to the High Court of Mysore under article 226 of the Constitution of India for quashing the certificates issued by the Income tax Officer. The High Court held that the Income tax Officer could not, without issuing fresh notices of demand, after the Appellate Assistant Commissioner of Income tax reduced the taxable income, treat the respondent as a defaulter and that the proceedings of the Collector based on the certificates issued by the Income tax Officer were illegal. Held:(per Sarkar and Hidayatullah, JJ.). The decision of the High Court was right. Per Sarkar, J. On the Income tax Officer 's order being revised in appeal, the default based on it and all consequential proceedings must be taken to have been superseded and fresh proceedings have to be started to realise the dues as found by the revised order. Per Hidayatullah, J. In view of the terms of section 29 of the Act, where an order is passed in appeal and the amount of tax reduced, the Income tax Officer must intimate to the assessee the reduced amount of tax and make a demand and give him an opportunity to pay before treating him as a defaulter. Per Shah, J. (dissenting) In the absence of any provision imposing an obligation upon the Income tax Officer to issue successive notice , of demand from time to time for recovery of the amount due during the process of assessment, it must be held that the notices of demand issued by the Income tax Officer in exercise of the power under section 29 must be enforced in the manner provided by section 46 and within the period of limitation 149 provide in cl. (7) of section 46, even after the appeal against the order of assessment by the Income tax Officer is disposed of, subject to adjustment of the amount to be recovered in the light of the order of the Appellate Assistant Commissioner.

Appeal No. 1496 of 1993. From the Judgment and Order dated 20.2.1985 of the Orissa High Court in First Appeal No.139 of 1974 Raj Kumar Mehta for the Appellant. The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J. Heard the counsel for the appellant. None appears for the respondent though served. Leave granted. This appeal by the Orissa State Electricity Board is preferred against the judgment of the Orissa High Court allowing partly an appeal preferred .by the respondent. The dispute pertains to the liability of the consumer (respondent in this appeal) to pay the minimum charges during the period subsequent to the date of disconnection of supply of energy to him for the non payment of electricity dues. The respondent is an industry. It entered into an agreement with the appellant for supply of electricity on March 5, 1965. The agreement was valid for a period of five years. He started availing of the energy with effect from July 31, 1965. The supply of his industry was disconnected on April 30, 1968 for non payment of electricity charges. Since the consumer also failed to pay the minimum charges for the period subsequent to the date of disconnection, the Board filed a suit for the amount due on account of the electricity consumed between April 1, 1968 and April 30, 1968 and for the minimum charges for the period May 1, 1968 to March 5, 1970. (It may be remembered that the agreement between parties was valid upto March 5, 1970). The Trial Court decreed the suit as prayed for along with interest 862 of 6% per annum on the amount decreed from the date of suit till the date of decree and also future interest at the same rate till full satisfaction. On appeal, the High Court sustained the decree of the Trial Court only for the period upto the date of disconnection (April 30, 1968) but disallowed the claim for the period subsequent to the date of disconnection. The reasoning of the High Court is that inasmuch as the supply was disconnected and the respondent consumer did not avail of any energy whatsoever during the period subsequent to the disconnection, it is not liable to pay the minimum charges. In this appeal, it is contended by the learned counsel for the appellant that the question arising herein is concluded in favour of the Board by the decision of this Court in Bihar State Electricity Board, Patna and Ors. vs M/s Green Rubber Industries and Ors., [1990] 1 S.C.C. 731. On a perusal of the judgment, we find that was also a case where the claim inter alia pertained to the period subsequent to the date of disconnection till the expiry of the agreement. In that case too, minimum charges were claimed by the Board even for the period during which the supply remained disconnected and no energy whatsoever was availed of by the consumer. We also find that clause (4) of the agreement considered ' in the said decision and clauses (6) and (13) of the agreement concerned herein are substantially same. Clause (13) of the agreement between the parties hereto does oblige the consumer to pay a certain minimum charges in any event. The clause reads as follows: "Clause 13. The consumer shall (subject to the provisions hereinafter contained) pay to the Engineer for the power demand and electrical energy supplied under this Agreement, the charges to be ascertained as mentioned below viz. (Government resolution on tariff to be inserted here) LARGE INDUSTRIES: For demand of 125 K.V.A. and above for supply at 11 K.V. at (i) Rs.5.50 paise per K.V.A. per month plus (ii) Rs.0.08 paise per K.W.H. per month subject to an overall maximum rate of Rs.0.09 paise per K.W.H. and 863 without prejudice to payment of minimum charge of 75 per cent of the contract demand at the above rate of Rs.5.50 paise per K.V.A. per month and subject further to absolute minimum payment on 125 K.V.A. in the first part of the tariff. For less than 250 K.V.A the demand may be metered in K.W. and charged for at Rs.6.00 per K.W. per month. Besides the charges for K.W.H. consumed at the rate specified above. For supply at M.T. less than 11 K.V.A and M.T. less that 11 K.V.A. and M.T. the above rate will be increased by 10%. " The reasons for such a stipulation and its justifiability are duly and fully explained by this Court in the aforesaid decision. It is not necessary for us to reiterate the same. The appeal is accordingly allowed. The Judgment of the High Court is set aside. The judgment and decree of the Trial Court is restored. No costs. T.N.A. Appeal allowed.

The respondent industry entered into an agreement with the appellant Board for supply of electricity on 5th March, 1965. Under the agreement, which was valid for five years i.e. upto 5th March 1970, consumer was obliged to pay certain minimum charges in any event. However, on 30th April, 1968 supply of electricity to respondent was disconnected for non payment of electricity charges. Since the respondent also failed to pay the minimum charges for the period subsequent to the date of disconnection, the Electricity Board riled a suit for the amount due on account of the electricity consumed upto April 30, 1968 and for the minimum charges from May 1, 1968 to March 5, 1970. The Trial Court decreed the suit. The respondent preferred an appeal before the High Court which sustained the Trial Court 's decree only for the period upto the date of disconnection but disallowed the claim for the period subsequent to the date of disconnection on the ground that since the respondent did not avail of any energy whatsoever during the period subsequent to the disconnection it was not liable to pay the minimum charges for that person. In appeal to this Court it was contended on behalf of the Electricity Board that in view of the judgment of this Court in the case of Bihar State Electricity Board, Patna and Ors. vs M/s Creen Rubber Industries and Ors., [1990] 1 S.C.C. 731 the respondent was liable to pay the minimum charges for the period subsequent to disconnection. 861 Allowing the appeal and setting aside the order of the High Court, this Court, HELD: Clause (13) of the agreement between the parties does oblige the consumer to pay a certain minimum charges in any event. The judgment and decree of the Trial Court is restored. [862 E, 863 D] Bihar State Electricity Board, Patna & Ors. vs M/s Green Rubber Industries and Ors., [1990] 1 S.C.C. 731, relied on.

N: Criminal Appeal No. 543 of 1976. Appeal by special leave from the judgment and order dated the 6th May 1975 of the Rajasthan High Court in D.B. Criminal Jail Appeal Nos. 277, 413 to 416 and 918 of 1971. Badri Das Sharma for the Appellant. Dalveer Bhandari for the Respondent. The Judgment of the Court was delivered by BAHARUL ISLAM, J. This appeal by special leave on behalf of the State of Rajasthan is directed against the judgment of the Rajasthan High Court acquitting the two respondents, Shrimati Kalki alias Kali and her husband, Amara (alongwith four other co accused). Respondent Kalki was convicted under Section 302 and Section 148 of the Penal Code and sentenced to imprisonment for life and for rigorous imprisonment for two years, respectively. The five other accused persons including respondent, Amara, were convicted under Section 302 read with Section 149 and under Section 147 of the Penal Code, and each of them was sentenced to imprisonment for life and to one and a half years rigorous imprisonment respectively. The material facts of the prosecution case were that there was a land dispute between Nimba (P.W.6) father of the deceased, Poona, on the one hand, and respondent Amara and the members of his family, on the other. On July 17, 1970 at about sunset the accused persons of whom respondent Kalki was armed with an axe and respondent, Amara with a dharia, came to the house of the deceased. At that time the deceased was inside his hut with his wife Mooli (P.W.1). Amara called Poona. Poona came out followed by his wife Mooli, when he was knocked down by Amara and Rama whereupon Kalki gave him blow with the axe on the neck. Poona met with instantaneous death. Mooli (P.W.1) raised an outcry when Geli, mother of the deceased (P.W.2) who had been at some distance from the hut came running to the place of occurrence and saw the assailants leaving the place. 506 3. Nimba lodged a report at the police station at Nana. Police registered a case. In due course the case was sent to, and tried by, the Session Judge who convicted and sentenced the six accused persons including the two respondents as stated above. This Court granted special leave to appeal only against the two respondents and refused it as against the other four. The question before us is whether the two respondents or any of them caused the death of Poona. There is no dispute that Poona met a homicidal death. The High Court has set aside the Order of conviction and sentence passed by the Session Judge on the grounds (1) that P.W.1 the widow of the deceased "is. a highly interested witness, in as much as, she is the wife of the deceased and there was an enmity between the deceased and the accused on account of the dispute about the agricultural land", and (2) "that there are material discrepancies in her statement". We have been led through the evidence of P.W. 1, the only eye witness in the case, of P.W.2, Geli, who says that she saw the respondents leaving the place of occurrence with the weapons in their hands, and of P.W.5 the Medical Officer, who held the Post Mortem examination on the deceased. His evidence fully supports the evidence of P.W.1, who deposed that respondent Kalki gave a blow on the neck of the deceased with an axe. P.W. 5 found one incised wound measuring 5" X 2" X 4" on the lateral side of the left side of neck. On a perusal of the evidence of these witnesses, we do not have the least doubt in our mind that it was respondent Kalki who gave an axe blow on the neck of the deceased and that respondent Amara came along with his wife with a dharia with the common intention of causing the death of Poona. In fact it was he who called out Poona from inside the hut, and felled down and facilitated the murder of Poona by his wife, Kalki. As mentioned above the High Court has declined to rely on the evidence of P.W.1 on two grounds: (1) she was a "highly interested" witness because she "is the wife of the deceased", and (2) there were discrepancies in her evidence. With respect, in our opinion, both the grounds are invalid. For, in the circumstances of the case, she was the only and most natural witness; she was the only person present in the hut with the deceased at the time of the occurrence, and the only person who saw the occurrence. True, it is she is the wife of the deceased; but she cannot be called an 'interested ' 507 witness. She is related to the deceased. 'Related ' is not equivalent to 'interested '. A witness may be called 'interested ' only when he or she derives some benefit from the result of a litigation; in the decree in a civil case, or in seeing an accused person punished. A witness who is a natural one and is the only possible eye witness in the circumstances of a case cannot be said to be 'interested '. In the instant case P.W.1 had no interest in protecting the real culprit, and falsely implicating the respondents. The second ground on which the High Court refused to place reliance on the evidence of P.W. 1 was that there were "material discrepancies". As indicated above we have perused the evidence of P.W. 1. We have not found any "material discrepancies" in her evidence. The discrepancies referred to by the High Court are, in our opinion, minor, insignificant, natural and not 'material '. The discrepancies are with regard to as to which accused "pressed the deceased and at which part of the body to the ground and sat on which part of the body; with regard to whether the respondent Kalki gave the axe blow to the deceased while the latter was standing or lying on the ground, and whether the blow was given from the side of the head or from the side of the legs. In the depositions of witnesses there are always some normal discrepancies however honest and truthful they may be. These discrepancies are due to normal errors of observation, normal errors of memory due to lapse of time, due to mental disposition such as shock and horror at the time of the occurrence, and the like. Material discrepancies are those which are not normal, and not expected of a normal person. As indicated above we have not found any material discrepancies in the evidence of the P. W. 1. 7. Learned counsel for the respondent submitted that the appeal involved only appreciation of evidence and this Court may not interfere with the findings of facts resulting from appreciation of evidence. It is true that in an appeal under Article 136 of the Constitution this Court normally does not interfere with findings of facts arrived at by the High Court. But when it appears that the findings of facts arrived at are bordering on perversity and result in miscarriage of justice, this Court will not decline to quash such findings to prevent the miscarriage of justice. In our opinion the guilt of the two respondents has been established by the prosecution beyond reasonable doubt and their acquittal resulted in grave miscarriage of justice. 508 In the result we set aside the order of acquittal passed by the learned High Court and convict respondent Kalki alias Kali under section 302 of the Penal Code and respondent, Amara, under Section 302/34 of the Penal Code, and sentence each of them to suffer imprisonment for life. The appeal is allowed. The respondents are said to be on bail. They shall surrender forthwith to serve out their sentences. V.D.K. Appeal allowed.

Respondent Kalki alias Kali and her husband Amara (along with four other co accused) were charged, convicted under section 302 I.P.C. and sentenced to life imprisonment. While Kalki was also convicted and sentenced under section 148 I.P.C. for two years ' rigorous imprisonment, the other five accused were convicted and sentenced under section 147 I.P.C. for rigorous imprisonment for a period of one and a half years. In appeal the High Court of Rajasthan acquitted all of them on the grounds (i) that P.W. 1, the widow of the deceased "is. . a highly interested witness, inasmuch as, she is the wife of the deceased and there was an enmity between the deceased and the accused on account of the dispute about the agricultural land" and (ii) "that there are material discrepancies in her statement". This Court granted special leave to appeal only against Kalki and her husband and refused it as against the four. Dismissing the appeal, the Court ^ HELD: 1. It is true that in an appeal under Article 136 of the Constitution the Supreme Court normally does not interfere with findings of facts arrived at by the High Court. But when it appears that the findings of facts arrived at are bordering on perversity and have resulted in miscarriage of justice, the Court will not decline to quash such findings to prevent miscarriage of justice. [507 F G] 2. Material discrepancies are those which are not normal, and not expected of a normal person. In the depositions of witnesses there are always some normal discrepancies however honest and truthful the witnesses may be. These discrepancies are due to normal errors of observation, normal errors of memory due to lapse of time, due to mental disposition such as shock and horror at the time of the occurrence, and the like. There are no material discrepancies in the evidence of P.W. 1 so as to reject the evidence in its entirety. [507 D E] 3. "Related" is not equivalent to "interested". A witness may be called "interested" only when he or she derives some benefit from the result of a 505 litigation; in the decree in a civil case, or in seeing an accused person punished. A witness who is a natural one and is the only possible eye witness in the circumstances of a case cannot be said to be "interested". In the instant case. P.W. 1 had no interest in protecting the real culprit, and falsely implicating the respondents. [507 A B]

Civil Appeal No. 2173 of 1970. From the judgment and order dated 29th October, 1969 of the Madhya Pradesh High Court in Misc. Petition No. 89 of 1967. Gyan Chand Mathur and A.G. Ratnaparkhi for the Appellant. D.P. Mohanty and R.A. Shroff for Respondent No. 1. The judgment of the Court was delivered by KOSHAL J. This is an appeal by certificate granted by the High Court of Madhya Pradesh against a judgment of a learned Single Judge of that Court dismissing with costs a petition filed by the present appellant under article 226 of the Constitution of India challenging his demotion from the post of Superintendent of Police to that of Deputy Superintendent of Police. The facts giving rise to the dispute between the appellant and the State of Madhya Pradesh are now admitted on all hands and may be briefly stated. Prior to 13th April 1960 the appellant was a member of the Madhya Pradesh State Police Service and was working as a Deputy Superintendent of Police. On that date a meeting of the Committee set up in accordance with regulation 3 of the India Police Service (Appointment by Promotion) Regulations, 1955 (hereinafter called the Regulations) was held, and therein was prepared a list of such members of the State Police Service as were eligible and suitable for promotion to the Indian Police Service. The said Committee is popularly known as the "Selection Committee" and will be so referred to hereinafter. The list was approved by the Union Public Service Commission and thus became the Select List as envisaged in regulation 7 of the Regulations. The appellant was accordingly promoted to the Indian Police Service and was posted as a Superintendent of Police which position he held till the impugned reversion effected by an order dated 11th September, 1964. The reason for that reversion was that on the 18th of 355 September 1963 the Selection Committee reviewed the Select List, A purporting to act in accordance with regulation 5 of the Regulations and recommended that the appellant and 27 others be superseded The sole ground for the supersession was thus stated by the Selection Committee: "The Committee consider that, on an overall assessment, the records of these officers are not such as to justify their appointment to the Indian Police Service at this stage. The reversion of the appellant was challenged before the High Court with the contention inter alia that the ground set out by the Selection Committee in that behalf did not specify any reason, good, bad or indifferent, for his supersession, that under regulation 5 of the Regulations it was duty of the Selection Committee to record reasons and that not having been done the review of the Select List made on the 18th of September, 1963 was clearly in contravention of the Regulations and, therefore, as good as non est. Th contention was turned down by the learned Single Judge of the High Court, who dismissed the appellant 's petition, with the following observations: "The contention of learned counsel for the applicant that the giving of reasons under sub regulation (5) of regulation 5 for superseding an officer makes the order justiciable, does not appeal to us. It is not for the Court to see whether the reasons given by the Committee are sufficient or not, but it is for the State Government and the Central Public Service Commission to see the sufficiency of the reasons. " The contention thus rejected has been reiterated before us. Regulations 5 and 7 of the Regulations may be reproduced here with advantage: "5. Preparation of a list of suitable officers. (1) The Committee shall prepare a list of such members of the State Police Service as satisfy the condition specified in regulation 4 and as are held by the Committee to be suitable for promotion to the Service. 356 (2) The selection for inclusion in such list shall be based on merit and suitability in all respects with due regard to seniority. (3) The names of the officers included in the list shall be arranged in order of seniority in the State Police Service; Provided that any junior officer who in the opinion of the Committee is of exceptional merit and suitability may be assigned a place in the list higher than that of officers senior to him. (4) The list so prepared shall be reviewed and revised every year. (5) If in the process of selection, review or revision it is proposed to supersede any members of the State Police Service, the Committee shall record its reasons for the proposed supersession. Select List. (1) The Commission shall consider the list prepared by the Committee along with the other documents received from the State Government and, unless it considers any change necessary, approve the list. (2) If the Commission consider it necessary to make any changes in the list received from the State Government, the Commission shall inform the State Government of the changes proposed and after taking into account the comments, if any, of the State Government, may approve the list finally with such modification, if any, as may, in its opinion, be just and proper. (3) The list as finally approved by the Commission shall form the Select List of the members of the State Police Service. (4) The Select List shall ordinarily be in force until it is reviewed or revised in accordance with sub regulation (4) of regulation 5: 356 Provided that in the event of a grave lapse in the conduct or performance of duties on the part of any member of the State Police Service included in the Select List, a special review of the Select List may be made at any time at the instance of the State Government and the Commission may. if it so thinks fit, remove the name of such member of the State Police Service from the Select List. " It is not disputed that a Select List may be reviewed as stated in sub regulation (4) of regulation 7 read with sub regulation (5) of regulation 5. So all that has to be determined is whether the Selection Committee was bound to give reasons for the supersession of the appellant and whether the note recorded by it which sets out the ground for supersession does give any reason at all. The matter is really covered by a decision of this Court in Union of India vs Mohan Lal Capoor and others. In that case also the ground set out by the Selection Committee for the proposed supersession was: "On an over all assessment, the records of these officers are not such as to justify their appointment to the Indian Administrative Service/Indian Police Service at this stage in preference to those selected. " Except for the words "in preference to those selected" the ground just above set out is identical with the ground given by the Selection Committee in the case of the appellant. Rejecting this ground as being no statement of reasons within the meaning of sub regulation (5) of regulation 5, Mathew, J., speaking for the Court, observed: "We next turn to the provisions of Regulation 5 (5) imposing a mandatory duty upon the Selection Committee to record "its reasons for proposed supersession". We find considerable force in the submission made on behalf of the respondents that the "rubber stamp" reason given mechanically for the supersession of each officer does not amount to "reasons for the proposed supersession. " 358 the most that could be said for the stock reason is that it is a general description of the process adopted in arriving at a conclusion. This apology for reasons to be recorded does not go beyond indicating a conclusion in each case that the record of the officer concerned is not such as to justify his appointment "at this stage in preference to those selected". "In the context of the effect upon the rights of aggrieved persons, as members of a public service who are entitled to just and reasonable treatment, by reason of protections conferred upon them by articles 14 and 16 of the Constitution, which are available to them throughout their service, it was incumbent on the Selection Committee to have stated reasons in a manner which would disclose how the record of each officer superseded stood in relation to records of others who were to be preferred, particularly as this is practically the only remaining visible safeguard against possible injustice and arbitrariness in making selections. If that had been done, facts on service records of officers considered by the Selection Committee would have been correlated to the conclusions reached. Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject matter for a decision whether it is purely administrative or quasi judicial. They should reveal a rational nexus between the facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable. We think that it is not enough to say that preference should be given because a certain kind of process was gone through by the Selection Committee. This is all that the supposed statement of reasons amounts to. We, therefore, think that the mandatory provisions of Regulation 5 (5) were not complied with. " With respect we fully agree and hold that the Select List prepared in accordance with the recommendations of the Selection Committee made in its meeting held on the 18th of September 1963 contravened the mandate in sub regulation 5 of regulation 5. 5. In the result we accept the appeal, set aside the impugned judgment and quash the Select List just above mentioned in so far 359 as it relates to the appellant, as also the order of his reversion. He shall be entitled to all consequential benefits even though he has since retired from service. In the circumstances of the case, however, we leave the parties to bear their respective costs. P.B.R. Appeal allowed.

On being selected by a Selection Committee constituted under the Indian Police Service (Appointment by Promotion) Regulations, 1955 the appellant, a Deputy Superintendent of Police prior to 13th April, 1960, was promoted as Superintendent of Police. In September, 1963, purporting to act under regulation 5 of the Regulations, the Selection Committee recommended his supersession, along with some others, on the ground that the Committee considered that the records of "the officers were not such as to justify their appointment to the Indian Police Service at this stage". He was reverted in September. Before the High Court the appellant contended that the Selection Committee 's failure to specify the reasons for his supersession, in contravention of the Regulations, rendered the list non est. This plea was rejected. Allowing the appeal: ^ HELD: The Select List reverting the appellant to a lower post prepared in accordance with the recommendations of the Selection Committee contravened the mandate in sub regulation (5) of Regulation 5. [358 G] Regulation 5(5) imposed a mandatory duty upon the Selection Committee to record its reasons for the proposed supersession. In the context of the protection conferred on public servants by articles 14 and 16 of the Constitution it was incumbent on the Selection Committee to have stated reasons in a manner which would disclose how the record of each officer superseded stood in relation to the records of others who were to be preferred. This is the only visible safeguard against possible injustice and arbitrariness in making selections. Had that been done it would have been possible to correlate facts on service records considered by the Selection Committee with the conclusions reached. [358 C] 354 Reasons which are the links between the materials on which certain conclusions are based and the actual conclusions disclose how the mind is applied to the subject matter for a decision, They should reveal a rational nexus between the facts considered and the conclusions reached. [358 E] Union of India vs Mohan Lal Capoor & Ors., ; ; applied.

Civil Appeal No. 4023 of 1982 etc From the Judgment and order dated 31 3.1982 of the Allahabad High Court in C.M.W.P. No. 1303 of 1979. G. Vishwanath Iyer, Satish Chandra, D.P Singh, S P. Gupta, G.L. Sanghi, Gopal Subramaniam, Shobha Dikshit, H.K. Puri, S D. Lal, M.K.D. Namboodry, R.N. Keshwani, Irfan Ahmad, S Balakrishnan, A.D. Sikri, Pradeep Misra, L R. Singh, Jayanand, Gopal Singh, C.P. Pandey, Mrs. Rani Chhabra and Krishnamani for the appearing parties. The Judgment of the Court was delivered by SINGH, J. These three civil appeals directed against the judgment of the High Court of Allahabad and four writ petitions filed under Article 226 of the Constitution raise common questions of law relating to determination of seniority of members appointed as Munsifs in the Uttar Pradesh Nyayik Seva as a result of competitive Examinations of 1970, 1972 and 1973 held under the Uttar Pradesh Civil Service (Judicial Branch) Rules, 195 1 (hereinafter referred to as 804 the Rules). Since the appeals and the petitions raise common questions of law they have been heard together and are being disposed of by a common judgment. On September 3, 1970 a Notification was issued by the Public Service Commission inviting applications for recruitment to 85 posts of Munsifs. In this examination 918 candidates appeared, out of whom 294 candidates on the basis of their marks in written papers, were called for viva voce test. After completion of the written and viva voce test, the commission submitted a list of approved candidates to the Government on October 25, 1971 recommending the names of 46 candidates for appointment to the service, which shall hereinafter be referred to as the Ist list of 1970 examination. On receipt of the list of 46 candidates the State Government requested the Commission to recommend some more candidates for appointment to the service as there was shortage of Munsifs, and it further suggested that the minimum of 40 per cent marks in the aggregate may be reduced to 35 per cent. The Commission agreed to the State Government 's suggestion and thereafter it forwarded another list of 33 candidates on April 25, 1972 for appointment to the service which shall hereinafter be referred to as the IInd list. This list included those who had obtained 35 per cent marks in the aggregate, as well as 35 percent marks in viva voce. All the 79 candidates, as recommended by the Commission in the aforesaid two lists were appointed to service by different Notifications issued between May, 1972 to 12th June 1973. On July 17, 1973 Notification was issued determining inter se seniority of all the 79 candidates appointed on the basis of 1970 examination in accordance with of their position in the list prepared by the Commission under Rule 19 of the Rules. Meanwhile, the Public Service Commission held another competitive examination for appointment to the 150 posts of l Munsifs which shall hereinafter be referred to as the 1972 Examination. The Written test was held in November, 1973 and the result was declared on 26th June 1974. The Public Service Commission forwarded a list of 150 successful candidates to the Government for appointment to the service under Rule 19 of the Rules and all those candidates were appointed to the service on different dates between (, 1975 to 1977. Some of the unsuccessful candidates of the 1970 Examination made representation to the State Government for considering their case for appointment on the basis of their aggregate marks irrespective of their low marks in the viva voce. The State Government by its letter dated 24th July, 1973 requested the Commission that in view of the 805 shortage of Munsifs in the State and since in view of the amendment of Rule 19 it was no longer necessary for a candidate to qualify independently in the viva voce, it may reconsider the result of the examinations of 1967, 1968, 1969 and 1970 and approve all those candidates for appointment to the service who might have obtained 40 per cent of marks or more in the aggregate even if they might have failed to secure the minimum marks in the viva voce test. The Commission refused to consider the proposal of the Government, as the minimum marks prescribed by the Commission under the then existing proviso to Rule 19 could not be ignored in judging the suitability of a candidate. Inspite of the Commission 's refusal the Government pursued the matter further, and it convened a meeting of the Chief Minister, Chief Justice of the High Court and the Chairman of the Public Service Commission on 3rd May, 1974. At that meeting it was decided that in view of the immediate need for Munsifs the Public Service Commission should be requested to recommend such candidates of 1967, 1968, 1969 and 1970 examination who might have secured 40 per cent or more marks in the aggregate, but could not qualify in the viva voce. The committee took the view that after the amendment of Rule 19 it was not necessary for a candidate to qualify in the viva voce test and therefore he could be appointed to the service if he had got 40 per cent or more marks in the aggregate. In pursuance of the decision taken by the said high level Committee the Government by its letter dated May 10, 1974 requested the Commission to forward the application forms and the marks obtained by the unsuccessful candidates of the Examinations held during the years 1967, 1968, 1969 and 1970 who might have got 40 per cent or more marks in the aggregate but might not have qualified in the viva voce. The letter enclosed a note containing the decision taken by the high level committee. The Commission by its letter dated 9th June 1974 informed the Government that the application forms and other particulars of the unsuccessful candidates of 1967, 1968 and 1969 examination had been destroyed, and therefore the Commission was unable to forward the names of candidates of those examinations as desired by the Government. But the Commission forwarded with a covering letter dated June 19, 1974 a list of 37 candidates of the 1970 Examination who had obtained 40 per cent or more marks in the aggregate but who had failed to secure 35 per cent qualifying marks in the viva voce which shall hereinafter be referred to as the lIIrd list. The Commission 's letter contained a note that the candidates mentioned therein had obtained 40 per cent or more marks in the aggregate but they had not been found suitable by the Commission. This IIIrd list contained the names of Rafiquddin and 36 others, who were unsuccessful at the 1970 Examination who will be referred to 806 hereafter as the "unplaced candidates" of the 1970 Examination. On receipt of the IIIrd list of the "unplaced candidates" the State Government after obtaining approval of the High Court issued a Notification dated August 19, 1975 appointing 21 candidates out of the list of 37 candidates as Munsifs with a note that the appointments were being made on the basis of the 1970 Examination conducted by the Commission and the persons appointed were "unplaced candidates" with a further note that their seniority would be determined later on out of the list of 37 candidates forwarded by the Commission under its letter dated June 19, 1974 the State Government found that the remaining 16 persons who had been unsuccessful at the 1970 Examination had again appeared in the 1972 Examination and they had been selected and appointed to the service. Therefore, the Government requested the Commission to select 16 more candidates from the 1972 Examination In pursuance of the Government 's request the Public Service Commission by its letter dated 14/ l5th July, 1976 forwarded another list of 16 candidates who had appeared in the 1972 Examination for appointment to the service. In March, 1977 the State Government published a seniority list of successful candidates of the competitive examination of 1970. The "unplaced candidates" belonging to the IIIrd list of the 1970 Examination made representation to the High Court for determining their seniority in accordance with Rule 22 of the Rules on the footing that they were recruited to the service in pursuance of 1970 Examination and therefore they were entitled to the seniority as candidates belonging to the examination held in 1970 irrespective of their appointment being made in 1975. They claimed that they were senior to those who had been recruited to service in pursuance of 1972 Examination as well as to those who had been recruited to service, earlier to them in pursuance of the 1970 Examination who were appointed in service in pursuance of Ist and the IInd list of 1970 Examination but who had secured lower marks in the aggregate. Their representation was rejected by the High Court as well as by the State Government as in their view the "unplaced candidates" were unsuccessful in the competitive examination of 1970, their appointment was not in accordance with the Rules and as such they were not entitled to seniority of 1970. Rafiquddin and 16 other "unplaced candidates" filed Writ Petition No. 1303 of 1979 under Article 226 of the Constitution before the High Court of Allahabad for quashing the decision of the High Court and the State Government rejecting their representation and also for the issue of a writ of mandamus directing the High Court to confirm the petitioners and to grant them seniority of 1970, and to rearrange the 807 seniority of Munsifs appointed in service in pursuance of 1970 Examination in order of merit on the basis of the aggregate marks obtained by each of the candidates at the said examination. A Division Bench of the High Court consisting of M.N. Shukla and K.M. Dayal JJ. by their Judgment dated 31st March, 1982 allowed the writ petition on the finding that the unplaced candidates were appointed in service on the basis of the result of 1970 examination. The Bench quashed the seniority list and issued a direction to the State Government and the High Court to prepare the seniority list of candidates of the 1970 Examination afresh in accordance with Rule 22 read with Rule 19 of the Rules and to confirm and promote them in accordance with the seniority list so drawn. The State of Uttar Pradesh has preferred Civil Appeal No. 4023 of 1982 against the judgment of the Division Bench. Civil Appeal No. 4024 of 1982 has been preferred by Sushil Kumar Srivastava and others against the aforesaid judgment of the Division Bench It should be stated here that D.P. Shukla and three other unsuccessful candidates at the 1970 Examination had filed another writ petition Writ Petition No. 4261 of 1974 in the High Court of Allahabad under Article 226 of the Constitution raising the grievance that even though they had secured higher marks in the competitive examination than those appointed to the service yet they were discriminated, as they had not been appointed to the service instead 37 candidates "belonging to the IIIrd list" were appointed although they had obtained lower marks. Another Division Bench of the High Court consisting of Satish Chandra CJ. and A.N. Verma J. by its judgment dated March 30, 1982 dismissed the said writ petition on the ground that since the petitioners therein had failed to secure minimum qualifying marks in the viva voce they were not entitled to selection. Civil Appeal No. 3736 of 1982 has been preferred by the unsuccessful petitioners against the aforesaid judgment. In addition to the aforesaid three civil appeals four writ petitions have also been filed raising the same controversy. Writ Petition No. 4636 of 1982 has been filed in this Court under Article 32 of the Constitution b(y Chandra Prakash Agrawal an unsuccessful candidate at the 1970 Examination, challenging the appointment of those who had failed to secure less than 40 per cent marks in the aggregate. Sushil Chand Srivastava a member of the service appointed in pursuance of the 1972 Examination has also filed Writ Petition No. 12818 of 1984 under Article 32 of the Constitution challenging the validity of the appointment of "unplaced candidates" of the 1970 Examination belonging to the IIIrd list which include Rafiquddin and others on the ground that their appointment was illegal and for that reason they 808 could not be treated senior to him. R.P. Lavaniya a member of the A service who was recruited in pursuance of the 1973 Examination has also filed Writ Petition No. 1347 of 1984 under Article 32 of the Constitution claiming seniority over Respondents 3 to is to the writ petition who had been recruited in service in pursuance of the 1972 Examination and appointed in service after the petitioner 's appointment. P.N. Parashar and 11 others who had been recruited to the service in pursuance of the 1972 Examination filed a writ petition under Article 226 of the Constitution before the High Court of Allahabad being writ petition No. 5409 of the 1982 challenging the seniority list prepared in pursuance of the judgment of the High Court in writ petition No. 1303 of 1979 (Rafiquddin and others vs State of Uttar Pradesh), on the ground that the "unplaced candidates" of the 1970 Examination were not entitled to seniority over the candidates of the 1972 Examination as they had been appointed to service earlier in time. That writ petition was transferred to this Court. Three Civil appeals and four writ petitions including the transferred petition have been heard together at length. The U.P. Civil Service (Judicial Branch) Rules 1951 that is, the Rules have been framed by the Governor under the proviso to Article 309 read with Article 234 of the Constitution in consultation with the U . P. Public Service Commission and the High Court which provide for recruitment to the service and lay down the conditions of service of personnel appointed to the U.P. Civil Service (Judicial Branch). Rule 3 provides that the Rules shall apply to Munsifs and Civil Judges. "Member of the service" as defined by Rule 4 means a person appointed in a substantive capacity 'under the provisions of these Rules" or of the Rules in force previous to the introduction of these Rules to a post in the cadre of the service. Rule S provides that the strength of the service shall be determined by the Governor from time to time in consultation with the High Court of Judicature at Allahabad. It confers power on the Governor to increase the cadre by creation of additional or temporary posts as may be necessary. Rule 6 provides that recruitment to the service shall be made on the result of a competitive examination conducted by the Public Service Commission. Rule 8 lays down that the Governor shall decide the number of recruits to be taken in any particular year. Rule 15 provides for holding of competitive examination for recruitment to the service and it lays down that the examination may be conducted at such time and on such date as may be notified by the Commission and shall consist of written examinations in such legal and allied subjects including procedure as may be included in the syllabus prescribed in Rule 18 and an examina 809 tion to test the knowledge of the candidate in Hindi, Urdu and also an interview to test the fitness of the candidates for appointment. Rule 18 prescribes syllabus for the competitive examination as contained in Appendix E. Appendix provides that the examination will include written and viva voce test, it specifies the subjects for written test and the marks allotted to each subject. Clause 5 of Appendix relates to the viva voce, and the notes appended thereto relevant for the determination of the question raised in these cases, are as under: "5. Viva Voce: The suitability of the candidate for employment in the judicial service will be tested with reference to his record at school, college and in university and his personality, physique. The questions which may be put to him may be of a general nature and will not necessarily be on an academic or legal nature. (I) The marks obtained in viva voce will be added to the marks obtained in the written papers and the candidate 's place will depend on the aggregate of both. (II) The Commission reserves the right to refuse to call for viva voce and candidate who has not obtained such marks in the two Law Papers as to justify such refusal or who does not satisfy the requirements of Rule 12(2) of the Rules. " Rule 19 requires the Commission to prepare list of candidates approved by it and to forward the same to the Government. Rule 19 is it stood in the year 1970 read thus: " 19. List of candidates approved by the Commission The Commission shall prepare a list of candidates who have taken the examination for recruitment to the service in order of their proficiency as disclosed by the aggregate marks finally awarded to each candidate. If two or more candidates obtain equal marks in the aggregate the Commission shall arrange them in order of merits on the basis of their general suitability for the service: Provided that in making their recommendations the Commission shall satisfy themselves that the candidate (i) has obtained such an aggregate of marks in the written test that he is qualified by his ability for appointment to the service; 810 (iii) has obtained in the viva voce test such sufficiently high marks that he is suitable for the service. While preparing the list the Commission had to satisfy itself that a candidate had obtained such aggregate marks in the written test as to qualify him for appointment to the service and further that he had obtained such sufficiently high marks in the viva voce test that he was suitable for the service. The position of the candidates in the list was to be determined on the aggregate marks obtained by a candidate both in written as well as viva voce test. Rule 21 provides that the Governor shall on receipt of the list prepared by the Commission consult the High Court and after taking into consideration the view of the High Court, select candidates for appointment from amongst those who stand highest in order of merit in the list if they are duly qualified in other respects. Rule 22 provides that the seniority of candidates shall be determined by the year of competitive examination on the results of which a candidate is recruited and his position in the list prepared under Rule lg. The Rules were amended by a Notification dated January 31, 1972. After the amendment the Rules are known as the U.P. Nyayik Seva Niyamavali 1951 Under the amended Rules the service has been designated as the U.P. Nyayayik Seva. It is not necessary to refer to all the amended provisions of the Niyamavali. After the amendment Rule 15 provides that the examination shall consist of written examination and interview to assess all round student career of the candidates and their personality address and general suitability. Rule 19 after the amendment reads as under: 19. List of candidates approved by the Commission "The Commission shall prepare a list of candidates who have taken the examination for recruitment to the service in order of their proficiency as disclosed by the aggregate marks finally awarded to each candidate. If two or more candidates obtain equal marks in the aggregate, the Commission shall arrange them in order of merit on the basis of their general suitability for the service; Provided that in making their recommendations the Commission shall satisfy themselves that the candidate has obtained such as aggregate of marks in the written test that he is qualified by his ability for appointment to the 811 A glance at the amended Rule 19 would show that the two clauses of the proviso have been omitted. Instead the new provision to Rule 19 has been inserted which lays down that in preparing the list of the approved candidates the Commission shall satisfy itself that the candidate has obtained such aggregate of marks in the written test that he is qualified by his ability for appointment to the service. Now, after the amendment the Commission has no power to prescribe or fix any minimum marks qualifying for viva voce. Now it is not necessary for a candidate to be successful in the viva voce. Prior to the amendment a candidate could not be selected unless he had obtained minimum marks as fixed by the Commission in viva voce. The amended proviso of Rule 19 has dispensed with that requirement though viva voce test has been retained. It is not necessary to refer to other Rules as these are the only Rules which are relevant for the purposes of determining the controversy involved in these cases. The "unplaced candidates" of 1970 examination claimed seniority of 1970 in terms of Rule 22 even though they were appointed in 1975. The State Government as well as the High Court rejected their claim as in their view the "unplaced candidates" formed a separate class as their recruitment to the service was made in special circumstances, even though they had been unsuccessful at the examination. The High Court on its administrative side rejected their claim for seniority whereupon Rafiquddin and other "unplaced candidates" approached the High Court on the judicial side by filing the writ petition under Article 226 of the Constitution challenging the order rejecting their representation. The Division Bench of the High Court constituting of M.N. Shukla and K.M. Dayal, JJ. held that the appointment of the "unplaced candidates" had been made in pursuance of the result of the competitive examination of 1970 and as such they were entitled to seniority of 1970 in accordance to Rule 22. The Bench further held that as the seniority in the service is determined on the basis of the year of the competitive examination the "unplaced candidates" belonging to the IIIrd list were entitled to the senior to those appointed to service on the basis of the result of the competitive examination of 1972 even though the "unplaced candidates" had been appointed to service later in time. At regards the inter se seniority of the candidates recruited to the service in pursuance of 1970 examination the High Court held that the Commission had no authority to prescribe any minimum qualifying marks for viva voce and instead it should have prepared the list of successful candidates on the basis of aggregate marks secured by each candidate irrespective of the marks obtained by a candidate in viva voce. Adverting to proviso to Rule 19 H 812 the Bench observed "It is true that the Rule authorises the Public A Service Commission to lay down such minimum marks but that it was so laid down prior to the holding of the examination of the year 1970 does not appear from the record. If any minimum marks were prescribed the candidate should have had notice of the same and only thereafter they could decide to appear or not to appear at the examination. The Public Service Commission cannot at its whim at any point of time without notice to the candidates fix minimum marks. " on these findings the High Court directed that the merit list of 1970 recruits, should be drawn afresh, on the basis of the aggregate marks secured by each candidate disregarding the qualifying marks fixed by the Public Service Commission for the viva voce test. The Division Bench directed that the seniority of the "unplaced candidates" included in the third list be refixed after rearranging the lists of candidates included in the first and second list on the basis of the aggregate marks. The effect of the judgment of the Bench has been that all those candidates who had been appointed to service in pursuance to the 1972 examination have been made junior to the "unplaced candidates" of 1970 examination although they were appointed much later. Further the seniority of regularly selected candidates and appointed to the service out of the Ist and IInd lists of the 1970 examination is adversely affected on account of the rearrangement of the merit list as many of the unsuccessful candidates have become senior to those who had been included in the Ist and IInd list. Further the candidates who had passed along with the successful candidates of 1972 examination also being unplaced candidates would go above all the candidates of the 1972 examination including the candidates who had stood first in the 1972 examination. After hearing the learned counsel for the parties at length and having given our anxious consideration to the controversy raised in these cases, we are of opinion that the Division Bench completely misconceived the Rules and rendered the judgment in total disregard of the facts available on record. As discussed earlier the Rules, entrust the Public Service Commission with the duty of holding competitive examination and recommending the names of suitable candidates as approved by it for appointment to the service on the basis of the proficiency shown by the candidates at the examination adjudged on the basis of the aggregate marks secured by them. The appointment to service is made from the list forwarded by the Commission to the State Government. Seniority in the service is determined on the basis of the year of the competitive examination irrespective of the date of appointment and the inter se seniority of candidates recruited to the service is determined on the basis of their ranking in the merit list. To 813 recapitulate Rules 19, 21 and 22 as they stood during the year 1970 i.e. prior to their amendment in January, 1972 were as under: " 19. List of candidates approved by the Commission The Commission shall prepare a list of candidates who have taken the examination for recruitment to the service in order of their proficiency as disclosed by the aggregate marks finally awarded to each candidate. If two or more candidates obtain equal marks in the aggregate the Commission shall arrange them in order of merits on the basis of their general suitability for the service: Provided that in making their recommendations the Commission shall satisfy themselves that the candidate (i) has obtained such an aggregate of marks in the written test that he is qualified by his ability for appointment to the (ii) has obtained in the viva voce test such sufficiently high marks that he is suitable for the service. Appointment (1) subject to the provisions of Rule 20, the Governor shall on receipt of the list prepared by the Commission consult the High Court and shall, after taking into consideration the views of the High Court, select candidates for appointment from amongst those who stand highest in order of merit in such list provided that he is satisfied that they duly qualified in other respects. (2) The Governor may make appointment in temporary or officiating vacancies from persons possessing necessary qualifications prescribed under these Rules. (3) All appointments made under this Rule shall be notified in the official Gazette. Seniority Subject to the provisions of Rule 31 the seniority of candidates already in service at the time when these rules come into force would be determined according to the Rules in force previously and for those appointed subsequently the seniority shall be determined by the year of competitive examination on the results of which a candi 814 date is recruited and the position in the list prepared under Rule 19 NOTE: A candidate may lose his seniority if without any reasonable cause he does not join his service when a vacancy is offered to him." (underlining by us) The aforesaid rules show that the Commission was required to prepare a list of candidates approved by it for appointment to the service. Rule 19 provided that the list of selected candidates should be arranged in order of merit on the basis of the aggregate marks finally awarded to each candidate in written as well as in viva voce test. Clause (1) of proviso to Rule 19 laid down that in making their recommendation, the Commission should satisfy itself that a candidate had obtained such aggregate of marks in the written test as to indicate that he was qualified by his ability for appointment to the service and further he had obtained in the viva voce test such sufficiently high marks that he was suitable for the service. In pursuance to clause (1) of the proviso, the Commission had power to fix minimum aggregate marks in written test for judging the suitability of a candidate for appointment to service. Similarly clause (ii) of the proviso conferred power on the Commission to fix the minimum marks for viva voce test to judge the suitability of a candidate for the service. One related to the fixation of the minimum in the aggregate marks in the written test while the other related to the fixation of the minimum marks in the viva voce test. The enacting clause of Rule 19 directed the Commission to prepare the list on the basis of the aggregate marks awarded to a candidate Aggregate marks obtained by a candidate determined his position in the list, but the proviso of the Rule required the Commission to satisfy itself that the candidate had obtained such aggregate marks in the written test as to qualify him for appointment to service and further he had obtained such sufficiently high marks in viva voce which would show his suitability for the service. The scheme underlying Rule 19 and the proviso made it apparent that obtaining of the minimum aggregate marks in the written test and also the minimum in the viva voce was the sine quo non before the Commission could proceed to make its recommendation in favour of a candidate for appointment to the service. The Commission in view of the clause (ii) of the proviso Commission had power to fix the minimum marks for vive voce for judging the suitability of a candidate for service Thus a candidate who had merely secured the minimum of the aggregate marks or above was not entitled to be included in the list of successful candidates unless he had also secured the minimum marks which had been prescribed for the viva 815 voce test. The Commission was required to include the name of candidates in the list prepared by it under Rule 19 on the basis of the aggregate of marks as obtained by each candidate both in written as well as in the viva voce test. Rule 20 provides that no person shall be appointed as member of the service unless he is medically fit. It further provides that a candidate who has passed the competitive examination and is finally approved for appointment to the service shall be required to pass an examination by a Medical Board. Rule 21 provides that the Governor, on receipt of the list prepared by the Commission under Rule 19 shall select candidates for appointment from amongst those who stand highest in order of merit in "such list" after taking into consideration the views of the High Court. The expression "such list" in Rule 2 l obviously refers to the list prepared by the Commission under Rule 19. It is, therefore, manifest that only those candidates can be appointed to the service who are included in the list prepared by the Commission under Rule 19. If the Commission does not approve and include the name of a candidate in the list prepared by it under Rule 19, he cannot be appointed to the service under Rule 21 Rule 22 provides that the seniority in the service shall be determined by the year of competitive examination on the results of which a candidate is recruited and his position in the list prepared under Rule 19. The Rule clearly postulates determination of seniority of members of the service recruited to the service through competitive examination with reference to their position in the list of approved candidates prepared by the Commission under Rule 19. The expression "member of the service" as defined by Rule 4(e) means a person appointed in substantive capacity under the provisions of the Rules. Rule 22 read with Rule 4(e) lays down in unmistakable terms that the seniority of members of service is to be determined on the basis of the year of competitive examination and not otherwise. In other words only those persons who are appointed in accordance with the Rules on the result of a competitive examination are entitled to the determination of their seniority in accordance with Rule 22. Seniority of a candidate appointed to the service would depend upon the result of the competitive examination and his position in the list prepared under Rule 19. Claim to seniority under Rule 22 cannot be upheld if a candidate is not approved for appointment under Rule 19 and has not found his way into service on the recommendation of the Commission. We therefore hold that the claim to seniority on the basis of the year of competitive examination as contemplated by Rule 22 is available only to those candidates who are approved by the Commission on the basis of their marks in the written and viva voce test at the examination. 816 Learned counsel for the respondent (unplaced candidates) urged that clause (2) of the proviso to Rule 19 did not confer power on the Commission to fix any qualifying minimum marks for viva voce. In the alternative he challenged the constitutional validity of the proviso on the ground of excessive delegation of legislative power. Rule 19 as it stood in the year 1970 read with Rule 18 and Appendix and the Note I of clause (5) of appendix required that the aggregate of marks obtained in the written and viva voce test, determined a candidate 's rank in the merit list. These provisions conferred power on the Commission to fix qualifying marks in the written test and if a candidate failed to obtain the minimum marks in the written test the Com mission might refuse to call him for viva voce test. The enacting clause of Rule 19 provide guidance for the Commission in preparing the list of approved candidates on the basis of the aggregate marks obtained by a candidate in the written as well as in viva voce test. Clause (2) of the proviso to Rule 19 did not no doubt expressly lay down that the minimum marks for the viva voce had to be prescribed but the language used therein clearly showed that the Commission alone had the power to prescribe minimum marks in viva voce test for judging the suitability of a candidate for the service. That is the clear meaning of the words in the proviso to Rule 19 "provided that in making their recommendation the Commission shall satisfy themselves that the candidate i) . ii) has obtained in the viva voce test such sufficiently high marks that he is suitable for the service. " Commission is required to judge the suitability of a candidate on the basis of sufficiently high marks obtained by a candidate in the viva voce test, it has to fix some percentage of marks which in its opinion may be sufficient to assess the suitability of a candidate. In the absence of a fixed norm, there could be no uniformity in assessing suitability of candidates in the viva voce test. The Commission had therefore power to fix the norm and in the instant case it had fixed 35 per cent minimum marks for viva voce test. The viva voce test is a well recognised method of judging the suitability of a candidate for appointment to public services and this method had almost universally been followed in making selection for appointment to public services. Where selection is made on the basis of written as well as viva voce test, the final result is determined on the basis of the aggregate marks. If any minimum marks either in the written test or in viva voce test are fixed to determine the suitability of a candidate the same has to be respected. Clause (ii) of the proviso to Rule 19 clearly confers power on the Commission to fix minimum marks for viva voce test for judging the suitability of a candidate for the service. We do not find any constitutional legal infirmity in the provision. 817 The learned counsel placed reliance on a Division Bench judgment of the Mysore High Court in K.N. Chandrasekhra & Ors. vs State A of Mysore & Ors., AIR In that case A.R. Somnath Iyer, J. speaking for the Bench observed that the power to fix minimum marks in viva voce test for judging the suitability of a candidate for appointment to State Judicial Service was legislative in character and it could not be exercised by the Public Service Commission. He also held that under Article 234 of the Constitution it would be a special duty and responsibility of the Commission alone to make a Rule prescribing the minimum marks for viva voce examination and in the absence of such a rule the committee constituted could not prescribe any such minimum standard. No doubt this decision support the submission raised on behalf of the unplaced candidates but a Full Bench of the Mysore High Court had not approved the view taken in K.N. Chandrasekhra 's case as can be gathered from T.N. Manjula Devi vs State of Karnataka. [ 1982] Labour and Industrial Cases 759. In the latter case the Court held that the process of selection of suitable candidates to a responsible post involved a minimum standard to be crossed by candidates and that had to be fixed by the selection commit tee. I earned counsel for the respondent referred to a decision of this Court in Durga Charan Misra vs State of Orissa, W.P. 1123 of 1986 decided on 27.8.1987 for the proposition that the Commission had no power to fix the qualifying marks for the viva voce test. We have carefully considered the decision but we do not find anything therein to support the respondents ' contention. In that case the question for consideration before this court was whether the minimum marks prescribed by the Commission for the viva voce test for appointment to the State Judicial Service of orissa was justified. The Court on an analysis of the relevant rules of the orissa Judicial Service Rules 1964 held that there was no rule prescribing the minimum qualifying marks for the viva voce test. The court found that the Commission had fixed qualifying marks and on that basis it had excluded candidates securing higher marks in written test. The Court allowed the petition and quashed the selection made by the Commission and directed the Commission to prepare the select list afresh on the basis of the aggregate marks obtained by the candidates in the written examination and the viva voce test. This decision does not advance the case of respondents in view of clause (ii) of the proviso to Rule 19. So long clause (ii) of proviso to Rule 19 remained in force the Commission had power to fix minimum qualifying marks for the viva voce test. Thus even if a candidate had obtained higher aggregate marks in written and viva voce test but if he had failed to secure the minimum marks in the viva voce test his name could not be included in the list prepared by the Commission H 818 under Rule 19. This view was taken by another Bench of the High Court in D.P. Shukfa 's case, and with which we agree. There is no dispute that none of the unplaced candidates of 1970 examination (those included in the third list) had secured minimum marks of 35 per cent in the viva voce test and for that reason they were not approved by the Commission, although they had obtained more than 40 per cent marks in the aggregate. Learned counsel for the respondents urged that 35 per cent of qualifying marks fixed by the Commission for the viva voce test was unreasonable and excessive. In Lila Dhar vs State of Rajasthan, [1982] SCR 320 this Court held that while a written examination assessed a candidate 's knowledge and intellectual ability an interview test is valuable to assess a candidate 's over all intellectual and other qualities. The interview permits an assessment of qualities of character which written papers ignore, it assesses the man himself and not his intellectual abilities. The Court observed that there could not be any rule of thumb regarding the precise weight to be given to the viva voce test. It must vary from service to service according to the requirement of service the minimum qualifications may be prescribed, the age group from which the selection is to be made, the body to which the task of holding the interview is entrusted. There can be no doubt that viva voce test performs a very useful function of assessing personal characteristics and traits of a candidate. The answer to question as to what weight should be attached to viva voce test where both written and viva voce test are held for making the selection, would depend upon the purpose of the selection. Chinnappa Reddy, J. speaking for the Court observed "Thus, the written examination assesses the man 's intellect and the interview test the man himself and "the twain shall meet" for a proper selection. If both written examination and interview test are to be essential features of proper selection the question may arise as to the weight to be attached respectively to them. In the case of admission to a college, for instance, where the candidate 's personality is yet to develop and it is too early to identify the personal qualities for which greater importance may have to be attached in later life, greater weight has per force to be given to performance in the written examination. The importance to be attached to the interview test must be minimal. That was what was decided by this Court in Periakaruppan vs State of Tarlilnadu, Ajay Hasia etc. vs Khalid Mujib 819 Sehravardi & Ors. etc. and other cases. In the other hand, in the case of service to which recruitment has necessarily to be made from persons of mature personality, interview test may be the only way, subject to basic and essential academic a professional requirements being satisfied. To subject such persons to a written examination may yield unfruitful and negative results, apart from its being an act of cruelty to those persons. There are, of course, many services to which recruitment is made from younger candidates whose personalities are on the threshold of development and who show signs of great promise, and the discerning may in an interview test, catch a glimpse of the future personality. In the case of such services, where sound selection must combine academic ability with personality promise, some weight has to be given, though not much too great weight, to the interview test. There cannot be any rule of thumb regarding the precise weight to be given. It must vary from service to service according to the requirement of the service, the minimum qualifications prescribed, the age group from which the selection is to be made, the body to which the task of holding the interview test is proposed to be entrusted and host of other factors. It is a matter for determination by experts. It is a matter for research. It is not for courts to pronounce upon it unless exaggerated weight has been given with proven or obvious oblique motives. The Kothari Committee also suggested that in view of the obvious importance of the subject, it may be examined in detail by the Research Unit of the Union of Public Service Commission. In A.K. Yadav vs State of Haryana, ; a Constitution Bench of this Court approved the view expressed in Lila Dhar 's case. The Court observed there cannot be any hard and fast rule regarding the weight to be given as against the written examination. It must vary from service to service according to the requirement of the service the minimum qualification prescribed age group from which the selection is to be made the body to which the task of holding the interview test is proposed to be entrusted and a host of other factors. It is a matter for determination by experts. The Court does not possess the necessary equipment and it would not be right for the court to pronounce upon it. In Lila Dhar 's case 25 per cent of marks flxed for viva voce test was upheld. In A.K. Yadav 's case selection made by the Haryana Public Service Commission for appointment to the post of Haryana Civil 820 Service (Executive and other allied services) was under challenge. The A Court held that allocation of 33.3 per cent for viva voce was high as it opened door for arbitrariness and in order to diminish it if not eliminate the same the percentage needs to be reduced. The Constitution Bench made observation that marks for viva voce test should not exceed 12.2 per cent. In spite of these observations the Constitution Bench did not interfere or strike down the selection instead it directed the Commission to give one more opportunity to the aggrieved candidates to appear at the competitive examination. In the instant case there has been no allegation of mala fides or arbitrariness against the Commission which held the viva voce test. In the circumstances we do not consider it necessary to set aside selection or issue any direction to the Public Service Commission or to the State Government as Rules relating to viva voce test have already been amended. After the amendment of the Rules on January 31, 1972 no minimum qualifying marks can be fixed by the Commission for viva voce test and therefore it is not necessary to issue any direction in the matter. The Division Bench of the High Court observed that the Com mission had no authority to fix any minimum marks for the viva voce test and even if it had such a power it could not prescribe the minimum marks without giving notice to the candidates. The Bench further observed that if the Commission had given notice to the candidates before the steps for holding the competitive examination were taken the candidates may or may not have appeared at the examination. In our opinion the High Court committed a serious error in applying the principles of natural justice to a competitive examination. There is a basic difference between an examination held by a college or university or examining body to award degree to candidates appearing at the examination and a competitive examination. The examining body or the authority prescribes minimum pass marks. If a person obtains the minimum marks as prescribed by the authority he is declared successful and placed in the respective grade according to the number of marks obtained by him. In such a case it would be obligatory on the examining authority to prescribe marks for passing the examination as well as for securing different grades well in advance. A competitive examination on the other hand is of different character. The purpose and object of the competitive examination is to select most suitable candidates for appointment to public services. A person may obtain sufficiently high marks and yet he may not be selected on account of the limited number of posts and availability of persons of higher quality. Having regard to the nature and characteristics of a competitive examination it is not possible nor necessary to give notice 821 to the candidates about the minimum marks which the Commission may determine for purposes of eliminating the unsuitable candidates. The rule of natural justice does not apply to a competitive examination. The question arises as to whether the unplaced candidates included in the third list" were appointed to the service on the result of the competitive examination of 1970. We have already referred to necessary facts in detail indicating the circumstances under which the unplaced candidates (included in the third list) of 1970 examination were appointed. Initially the Public Service Commission had fixed 40 per cent of aggregate marks and 35 per cent as minimum marks in the viva voce test for judging the suitability of candidates and on that basis it had recommended 46 candidates for appointment but subsequently on a suggestion made by the Government the Commission forwarded another list of 33 candidates for appointment to service on the basis of 35 per cent marks in the aggregate as well as 35 per cent minimum marks in viva voce. In forwarding the first and the second list, the Commission had applied the criteria of minimum marks of 35 per cent in viva voce test. The Commission had not recommended any candidate in either of the two lists, who had failed to secure minimum marks of 35 per cent in viva voce test. After the amendment of Rule 19 and deletion of the two proviso the State Government on the representation of the unsuccessful candidates of 1970 examination made suggestion to the Commission for approving more candidates of the Examinations held in 1967, 1968, 1969 and 1970 for appointment to the service on the basis of 40 per cent of marks in aggregate disregarding the minimum marks fixed for viva voce. The Commission refused to accept the suggestion but subsequently in pursuance of the decision taken by the high level committee it forwarded the list of 37 unsuccessful candidates of 1970 examination who had obtained 40 per cent or more marks in the aggregate but had not qualified in the viva voce. The Commission by its letter dated 19th June, 1974 for varded the list of 37 candidates to the State Government. The Commissioner 's letter shows that it had not approved the appointment of those included in the third list as they had failed to secure minimum prescribed marks in the viva voce test. During the course of hearing before us, serious dispute and doubt was raised on the genuineness of the annexure to the letter on behalf of the "unplaced candidates. " It was suggested on their behalf that the Commission had approved and recommended the names mentioned in the third list for appointment and that it had no where stated that they were unsuccessful candidates or that they had not been found suitable by the Commission. In order to resolve this 822 controversy, on our directive, the State Counsel produced the original A of the letter before the Court and on a perusal of the same we found that the Commission had neither in the body of the letter nor in the annexure appended thereto ever expressed its views that the candidates mentioned therein had been found suitable by it. On the contrary, the note appended to the list which was annexed to the letter clearly stated that the candidates mentioned in the list had not been found suitable by the Commission. This would clearly show that the unplaced candidates (those included in the third list) were unsuccessful at the competitive examination and their names were not included in the list of approved candidates as contemplated by Rule 19 as they had failed to obtain the minimum marks in the viva voce test. The Commission had never made any recommendation for their appointment ( instead under the influence of the Government, it had forwarded the list without its recommendation. The appointment of unplaced candidates made in pursuance of the decision taken by the high level committee, is not countenanced by the Rules. There is no escape from the conclusion that the unplaced candidates were not appointed to the service on the basis of the result of the competitive examination of 1970. Their appointment was made in breach of the Rules, in pursuance to the decision of the high level committee. It is well settled that where recruitment to service is regulated by the statutory rules, recruitment must be made in accordance with those Rules, any appointment made in breach of rules would be illegal. The appointment of 2 1 "unplaced candidates" made out of the third list was illegal as it was made in violation of the provisions of the Rules. The high level committee which took decision for recruitment of candidates to the service on the basis of the 40 per cent aggregate marks disregarding the minimum marks fixed by the Commission for viva voce test had no authority in law, as the Rules do not contemplate any such committee and any decision taken by it could not be implemented. We are surprised that the Chief Justice, Chief Minister as well as the Chairman of the Commission agreed to adopt this procedure which was contrary to the Rules. The high level committee even though constituted by. highly placed persons had no authority in law to disregard the Rules and to direct the Commission to make recommendation in favour of unsuccessful candidates disregarding the minimum marks prescribed for the viva voce test. The high level committee 's view that after the amendment of Rule 19, the minimum qualifying marks fixed for viva voce could be ignored was wholly wrong. Rule 19 was amended in January 1972, but before that 1970 examination had already been held. Since the amendment was not retrospective the 823 result of any examination held before January 1972 could not be determined on the basis of amended Rules. The Public Service Commission is a constitutional and independent authority. It plays a pivotal role in the selection and appointment of persons to public services. It secures efficiency in the public administration by selecting suitable and efficient persons for appointment to the services. The Commission has to perform its functions and duties in an independent and objective manner uninfluenced by the dictates of any other authority. It is not sub servient to the directions of the Government unless such directions are permissible by law. Rules vest power in the Commission to hold the competitive examination and to select suitable candidates on the criteria fixed by it. The State Government or the high level committee could not issue any directions to the Commission for making recommendation in favour of those candidates who failed to achieve the minimum prescribed standards as the Rules did not confer any such power on the State Government. In this view even if the Commission had made recommendation in favour of the unplaced candidates under the directions of the Government the appointment of the unplaced candidates was illegal as the same was made in violation of the Rules. On behalf of the respondents the "unplaced candidates" it was contended that there was acute shortage of Munsif/Magistrates in the State as a result of which large number of cases were pending in the courts. In order to meet the shortage of Munsifs State Government and the high level committee, keeping in view the amendment of Rule 19 suggested to the Commission to recommend the names of those candidates who may have obtained 40 per cent or more marks in the aggregate disregarding the minimum qualifying marks fixed for the viva voce test in the examination of 1967, 1968, 1969 and 1970. It was urged that the suggestion of the committee was accepted by the Commission and therefore it forwarded the names of 37 candidates for appointment to the service. We have already noticed that the Commission never agreed to the proposal. The Chairman of the Commission was a member of the high level committee but the Commission never took any decision to accept the proposals of the high level committee. No material has been placed before the court to support this contention. On the contrary, the Commission 's letter dated 19th June 1974, clearly indicates that the Commission as directed by the State Government merely forwarded the list of 37 candidates of 1970 examination, without making any recommendation and yet they were appointed in service in breach of the Rules. But even if the Commission had agreed to the Government 's suggestion, their appointments continued to be 824 illegal, as the same were made in breach of Rules. There was no justification for the appointment of the unsuccessful candidates in 1975, because by that time result of 1972 examination had been announced and duly selected candidates were available for appointment. In this context, it is necessary to consider as to how long the list of candidates for a particular examination can be utilised for appointment. There is no express. provision in the Rules as to for what period the list prepared under Rule 19 can be utilised for making appointment to the service. In the absence of any provision in the Rules a reason able period must be followed during which the appointment on the basis of the result of a particular examination should be made. The State Government and the Commission had announced 85 vacancies for being filled up through the competitive examination of 1970. In normal course, 85 vacancies could be filled on the basis of the result of the competitive examination of 1970 but if all the vacancies could not be filled up on account of non availability of suitable candidates, the appointment to the remaining vacancies could be made on the basis of the result of the subsequent competitive examination. The unfilled vacancies of 1970 examination could not be filled after 5 years as subsequent competitive examinations of the year 1972 and of the year 1973 had taken place and the results had been declared. The list prepared by the Commission on the basis of the competitive examination of a particular year could be utilised by the Government for making appointment to the service before the declaration of the result of the subsequent examination. If selected candidates are available for appointment on the basis of the competitive examinations of subsequent years, it would be unreasonable and unjust to revise the list of earlier examination by changing norms to fill up the vacancies as that would adversely affect the right of those selected at the subsequent examination in matters relating to their seniority under rule 22. The 1970 examination could not be utilised as a perennial source or in exhaustiable reservoir for making appointments indefinitely. The result of a particular examination must come to an end at some point of time, like a "dead ball" in cricket. It could not be kept alive for years to come for making appointments. The practice of revising the list prepared by the Commission under Rule 19 at the behest of the Government by lowering down the standards and norms fixed by the Commission to enable appointment of unsuccessful candidates is sub versive of rule of law. This practice is fraught with dangers of favourtism and nepotism and it would open back door entry to the service. We are, therefore, of the opinion that once the result of the subsequent examination of 1972 was 825 declared, the Commission could not revise the list of approved candidates of 1970 examination prepared by it under Rule 19 at the behest of the Government by lowering down the standard fixed by it. In C. Channabasavaiah vs State of Mysore & Ors., l 1965] I SCR 360 the Mysore Public Service Commission made selection and appointment to services in the Mysore State to Class I and II posts of Administrative Services. After the viva voce interviews were held the Commission published a list of 98 successful candidates who were appointed. After the announcement of the results, the State Government sent a list of 24 candidates for the consideration of the Government and the Commission approved it. These 24 candidates also were appointed. 16 candidates who had not been selected filed a writ petition before the Mysore High Court. During the pendency of the writ petition a compromise was effected, as a result of an undertaking given by the Government before the High Court and the 16 petitioners were also appointed. Thereafter, some other candidates who had not been selected, filed petition under Article 32 of the Constitution before this Court challenging the selection of 24 candidates selected by the Government and the 16 persons who had filed the writ petition. This Court set aside the appointments made at the instance of the Government and of the 16 writ petitioners. The Court observed: "It seems surprising that Government should have recommended as many a twenty four names and the Commission should have approved of all those names without a single exception even though in its own judgment some of them did not rank as high as others they had rejected. Such a dealing with public appointments is likely to create a feeling of distrust in the working of the Public Service Commission, which is intended to be fair and impartial and to do its work free from any influence from any quarter. " The procedure adopted for selection and the appointment practiced discrimination in violations of Articles 14 and 16 of the Constitution. While setting aside the selection and appointment the Court observed: "It is very unfortunate that these persons should be uprooted after they had been appointed but if equality and equal protection before the law have any meaning and if our public institutions are to inspire that confidence which is expected of them we would be failing in our duty if we did not, even at the cost of considerable inconvenience to 826 Government and the selected candidates to do the right thing." In Umesh Chandra Shukla vs Union of India & Ors., [ ; 1 a competitive examination was held for appointment to the posts of subordinate Judges in Delhi Judicial Service. Out of the candidates who appeared in the written examination only 27 candidates could qualify for viva voce test. The High Court approved the list of 27 qualified candidates but having regard to the fact that some candidates who had otherwise scored very high marks had been kept out of the zone of consideration for final selection by reason of their having secured one or two marks below the aggregate or the qualifying marks prescribed for the particular paper, the High Court directed that moderation of two marks in each paper to every candidate be done. As a result of moderation of two marks a second list was prepared showing the names of eight more candidates who also qualified for viva voce test. Petitions were filed by the unsuccessful candidates challenging the procedure adopted by the High Court and the selection committee in the preparation of the final list of the successful candidates. This Court struck down the list prepared by the High Court after adding the moderation marks. The Court observed that the High Court had no power to include the names of candidates who had not initially secured the minimum qualifying marks by resorting to the device of moderation, particularly when there was no complaint either about the question papers or about the mode of valuation. In striking out the list prepared by the High Court, this Court observed: "Exercise of such power of moderation is likely to create a feeling of distrust in the process of selection to public appointments which is intended to be fair and impartial. It may also result in the violation of the principle of equality and may lead to arbitrariness. " We are in agreement with the views expressed in the aforesaid decisions. The appointment of the unplaced candidates of 1970 examination at the behest of the high level committee was unwarranted by law and it was likely to create a feeling of distrust in the process of selection for appointment to public services which is intended to be fair and impartial. The high level committee had no power to lower down the standards fixed by the Commission with a view to accommodate unsuccessful candidates in the judicial services. The procedure adopted in appointing the unplaced candidates of 1970 examination was unauthorised by law and it practiced discrimination in violation of 827 Article 14 and Article 16 of the Constitution. A The unplaced candidates were appointed to the service in breach of the Rules and they form a separate class. They cannot be equated with those who were appointed to the service from the first and second list of 1970 examination as their appointment was made on the recommendation of the Public Service Commission. They remain unchallenged. Similarly, candidates appointed to the service on the basis of the result of the competitive examination of 1972 before the unplaced candidates were appointed, formed separate class as they were also appointed in accordance with the Rules. The "unplaced candidates" of 1970 examination cannot claim seniority over them on the basis of Rule 22 as their appointment was not made on the basis of the list approved by the Commission under Rule 19. In Shitla Prasad Shukla vs State of U.P. & Ors. [1986] Supp. SCC 1985 this Court held that an employee must belong to the same stream before he can claim seniority vis a vis others. Those appointed irregularly belong to a different stream and they cannot claim seniority vis a vis those who may have been regularly and properly appointed. We have recorded findings that 21 unplaced candidates of 1970 examination were appointed to the service illegally in breach of the Rules. We would, however, like to add that even though their appointment was not in accordance with law but the judgment and orders passed by them are not rendered invalid. The unplaced candidates are not usurpers of of fice, they were appointed by the competent authority to the posts of munsifs with the concurrence of the High Court, though they had not been found suitable for appointment according to the norms fixed by the Public Service Commission. They have been working in the judicial service during all these years and some of them have been promoted also and they have performed their functions and duties as de facto judicial officers. "A person who is ineligible to judgeship, but who has nevertheless been duly appointed and who exercise the powers and duties of the of fice is a de facto judge, he acts validly until he is properly removed. " Judgment and orders of a de facto judge cannot be challenged on the ground of his ineligibility for appointment. This doctrine in founded upon sound principles of public policy and justice. In Achanti Sreenivasa Rao & Ors. vs State of Andhra Pradesh, the de facto doctrine in relation to a judicial officer was considered at length. Chinnappa Reddy, J. speaking for the court observed: "A judge, de facto, therefore, is one who is not a mere 828 intruder or usurper but one who holds office, under colour of lawful authority, though his appointment is defective and may later be found to be defective. Whatever be the defect of his title to the office, judgments pronounced by him and acts done by him when he was clothed with the powers and functions of the office, albeit unlawfully, have the same efficacy as judgments pronounced and acts done by a judge de jure. Such is the de facto doctrine, born of necessity and public policy to prevent needless confusion and endless mischief. There is yet another rule also based on public policy. The defective appointment of a de facto judge may be questioned directly in a proceeding to which he be a party but it cannot be permitted to be questioned in a litigation between two private litigants, a litigation which is of no concern or consequence to the judge except as a judge. Two litigants litigating their private titles cannot be permitted to bring in issue and litigate upon the title of a judge to his office. Otherwise, so soon as a judge pronounces a judgment a litigation may be commenced for a declaration that the judgment is void because the judge is no judge. A judge 's title to his office cannot be brought into jeopardy in that fashion. Hence the rule against collateral attack on validity of judicial appointments. To question a judge 's appointment in an appeal against his judgment is, of course, such a collateral attack. " We have adverted to this aspect of the case in order to avoid any challenge to the validity of judgments and orders by the unplaced candidates of the 1970 examination on the ground on legal infirmity in their appointments. But having regard to the period of 12 years that have elapsed we do not propose to strike down their appointments. Now the question arises as to what seniority should be assigned to the unplaced candidates. Their claim for assigning them seniority on the basis of the competitive examination of 1970 is not sustainable in law as discussed above. They were appointed to service after five years of the examination and before their appointment competitive examination of 1972 had taken place and candidates selected under that examination had been appointed to service prior to their appointment. The directions issued by the High Court for rearranging the merit list of 1970 examination seriously affect the seniority of those who were regularly selected in accordance with the norms prescribed by the 829 Commission. Having regard to these facts and circumstances of the case we are of the opinion that the view taken by the High Court on its administrative side and the State Government that the unplaced candidates of 1970 examination should be assigned seniority below the last candidates of 1972 examination appointed to the service is just and reasonable. In our opinion it would be just and proper to assign seniority to the unplaced candidates of 1970 examination at the bottom of the list of 1972 candidates. There were 37 unplaced candidates of 1970 examination who were included in the third list, out of them 16 candidates appeared in the 1972 examination and they were successful and their names were approved by the Commission in the list prepared under Rule 19. The State Government appointed them in service. Under Rule 22 they are entitled to seniority of 1972 examination but in view of the judgment of the High Court in Rafiquddin 's case their seniority has been determined on the basis of their recruitment to service under the 1970 examination. We have already recorded findings that unplaced candidates of 1970 examination (as included in the third list) have not been recruited in service according to the Rules and their recruitment to service cannot be treated under 1970 examination for purposes of determining their seniority under Rule 22. We have further directed that 21 unplaced candidates of 1970 examination should be placed below the candidates of 1972 examination But so far as 16 remaining candidates are concerned, they were appointed to the service on the result of 1972 examination and their appointment does not suffer from any legal infirmity. They are therefore entitled to seniority of 1972 examination on the basis of their position in the merit list of that examination. They are however not entitled to the seniority of 1970 on the basis of the examination of that year as held by the High Court. We accordingly set aside the order of the Division Bench dated 30.3.1982 and direct the High Court and the State Government to determine the seniority of the 21 unplaced candidates of 1970 examination by placing them at the bottom of the candidates appointed on the result of 1972 examination. We accordingly allow Civil Appeal No. 4023 of 1982 and Civil Appeal No. 4024 of 1982. Civil Appeal No. 3736 of 1982. This appeal is directed against the judgment of another Division Bench of the High Court consisting of Satish Chandra and A.N. Verma, JJ. dated 30th March, 1982. The appellants appeared at the 1970 examination but they remained unsuccessful as they had failed to 830 secure 35 per cent of minimum marks at the viva voce test, although they had secured higher marks in the aggregate then those selected and appointed. They challenged the selection made in pursuance of 1970 examination. The Division Bench held that since the minimum marks fixed for viva voce test was integral part of the examination and as the appellants had failed to secure the requisite minimum marks in viva voce test, they. were not entitled to selection. The view taken by the Division Bench is consistent with our view. Accordingly, we dismiss the appeal. Writ Petition 4636 of 1982. The Petitioner O.P. Aggarwal was unsuccesful at the 1970 examination as he failed to obtain the minimum marks prescribed for viva voce test, although he had obtained more than 40 per cent marks in the aggregate. For the reasons stated earlier he cannot be granted relief of appointment to the service. Further he is disentitled to any relief on the ground of inordinate delay. The validity of the examination of 1970 was challenged before this Court in 1982. There is no plausible explanation for the delay. The petition is liable to be dismissed and we accordingly dismiss it. Writ Petition No. 12818 of 1984. The petitioner was recruited to the service on the basis of the competitive examination of 1972. He is aggrieved by the direction issued by the Division Bench of the High Court in Rafiquddin 's case, as his seniority was affected adversely. We have already taken the view that the unplaced candidates of 1970 examination cannot be senior to the candidates appointed in the service as a result of the 1972 examination. The writ petition succeeds to that extent. Transfer Case No. 15 of 1987. The petitioners were recruited to the U.P. Nyayayik Seva on the basis of the result of the competitive examination of 1972. They are aggrieved by the direction issued by the Division Bench in Rafiquddin 's case for rearranging the seniority. Since we have already expressed the view that the unplaced candidates of 1970 examination are not entitled to seniority over the candidates appointed to the service on the result of the 1972 Examination. The petition is to succeed partly. Writ Petition No. 13047 of 1985. 831 The petitioner was appointed to service on 22nd November 1976 on the basis of the result of the 1973 examination. His main grievance is that respondent Nos. 3 to 15 to the petition have been shown senior to him although they were appointed in service between May 1976 to November 1977 on the basis of the result of competitive examination of 1972. Since the respondents were treated senior by the High Court, they were promoted to the post of Chief Judicial Magistrate/Civil Judge ignoring the petitioner 's claim. On behalf of the petitioner, two submissions were made: (i) respondent Nos. 3 to 15 were appointed later in time, consequently they cannot be treated senior to the petitioner; (ii) the selection and appointment of respondent Nos. 3 to 15 was against rules and as such they are not entitled to seniority over the petitioner who is a regularly selected candidate. We do not find any merit in either of the two submissions. Rule 22 lays down criteria for determination of the seniority of members of service. It directs that the seniority shall be determined on the basis of the year of examination which means that a person recruited to the service in pursuance of the result of a particular year of examination would rank senior to the candidate who is recruited to service in pursuance of result of subsequent year of examination although he may have actually been appointed earlier in time. After the selection of candidates, several formalities are followed before appointment is made under Rule 2 1. The selected candidates are required to undergo medical examination, their character and antecedents are verified and the approval of High Court is obtained and only thereafter the Governor appoints them by issuing notification. Many a time, this process causes delay in making the actual appointment and in that process sometimes persons selected on the basis of subsequent examination are appointed before the successful candidates of earlier examination are appointed. But in view of Rule 22 the latter shall be senior to the former inrrespective of the date of appointment. Since there has been no challenge to Rule 22 and the appointment is not shown to be illegal for the reasons which we presently give, it must be applied in its plain terms in determining the seniority of those recruited to service in accordance with Rules. The petitioner was appointed in service on the basis of the result of the 1973 examination while respondent Nos. 3 to 15 were recruited to service on the basis of the result of the 1972 examination. Therefore, according to Rule 22, the respondent Nos. 3 to 15 are entitled to be senior to the petitioner. The mere fact that the petitioner was appointed few months before the respondent Nos. 3 to 15 were appointed, cannot override the express provision of Rule 22. 832 As regards, the second submission raised on behalf of the petitioner, we do not find any illegality in the appointment of respondent Nos. 3 to 15. The competitive examination of 1972 was held for recruiting 150 candidates, the examination was held in 1973 and 1974. 16 successful candidates of 1972 examination were included in the list of 37 unplaced candidates of 1970 examination and the Government 13 had appointed them in service treating them as unplaced candidates of 1970 examination. On the request of the State Government, the Public Service Commission made recommendation in favour of 16 more candidates on the basis of result of 1972 examination which included the name of respondent Nos. 3 to 15 and they were appointed to the service between May 1976 to November 1977. Their appointment in service was made by the State Government on the recommendation of Public Service Commission made in accordance with Rule 19 as they had obtained the requisite aggregate marks in the written and viva voce test. Unlike the 21 unplaced candidates of 1970 examination respondents 3 to 15 were appointed in accordance with the Rules, they are therefore entitled to their seniority in terms Rule 22. We find no merit in the petition. Before we close we would like to refer certain aspects which came to our notice during the hearing of the case relating to the functioning of the Public Service Commission, selection of candidates and their appointment to the Judicial Service. We were distressed to find that the Public Service Commission has been changing the norms fixed by it for considering the suitability of candidates at the behest of the State Government after the declaration of results. We have noticed that while making selection for appointment to the U.P. Judicial ' Service the Commission had initially fixed 40 per cent aggregate marks and minimum 35 per cent marks for viva voce test and on that basis it had recommended list of 46 candidates only. Later on at the instance of the State Government it reduced the standard of 40 per cent marks in aggregate to 35 per cent and on that basis it forwarded a list of 33 candidates to the Government for appointment to the service. Again at the behest of the State Government and with a view to implement the decision of the high level committee consisting of Chief Justice, Chief Minister and the Chairman of the Commission forwarded name of 37 candidates in 1974 ignoring the norms fixed by it for judging the suitability of candidates. The Commission is an independent expert body. It has to act in an independent manner in making the selection on the prescribed norms. It may consult the State Government and the High Court in prescribing the norms for judging the suitability of candidates if no norms are prescribed in the Rules. Once the Commis 833 sion determines the norms and makes selection on the conclusion of the competitive examination and submits list of the suitable candidates to the Government it should not reopen the selection by lowering down the norms at the instance of the Government. If the practice of revising the result of competitive examination by changing norms is followed there will be confusion and the people will lose faith in the institution of Public Service Commission and the authenticity of selection. The State Government had made a preposterous suggestion to the Commission that unsuccessful candidates of 1967, 1968, 1969 should be selected and recommended for appointment by ignoring the marks obtained by them in viva voce test. If the Commission had accepted the Government 's suggestion and forwarded the list and appointments had been made in 1975 as was done in the case of unplaced candidates of 1970 examination, it would have made a mockery of the entire system. We are of opinion that the Commission should take firm stand in these matters in making the selection in accordance with the norms fixed by law or fixed by it in accordance with law uninfluenced by the directions of the State Government unsupported by the Rules. We have noticed that a retired Judge of the High Court is appointed as an expert to assist the Commission in making the selection for appointment to the Judicial Service. This practice is not desirable . In A. K. Yadav 's case a Constitution Bench of this Court observed that when selection for judicial service of the State is made it is necessary to exercise the utmost care to see that competent and able persons possessing a high degree are selected because if we do not have good competent and honest judicial officers the democratic quality of the State itself will be in serious peril. It is therefore essential that when selections to the judicial service are being made a sitting Judge of the High Court should be nominated by the Chief Justice of the State to participate in the interview as an expert. The Constitution Bench further observed that a sitting High Court Judge would be in a better position to give advice to the Commission in the matter relating to selection of suitable candidates and his advice would be binding on the Commission unless there are strong and cogent reasons for not accepting such advice and such strong and cogent reasons must be recorded in writing by the Chairman and members of the Commission. The Constitution Bench had issued directions to the Public Service Commission of every State to follow this direction but it appears that in the State of U.P. this direction is not being followed. We therefore direct that in future selection for appointment to the Judicial Service shall be made by the Commission on the expert advice of a sitting 834 Judge of the High Court nominated by the Chief Justice. There is another aspect which requires consideration. Seniority of officers recruited to the service is determined on the basis of the year of the competitive examination under which they are recruited. We have noticed that generally there is a considerable interreguum between holding of the examination and the appointment of the selected candidates. Those selected under 1970 examination were appointed in 1973, 1974, and 1975 while those selected under the 1972 examination were appointed in 1975 and 1976 and also in 1977. Similarly the successful candidates of 1973 examination were appointed in 1976 and 1977. No system was followed in making appointments as some of the candidates selected in subsequent examination were appointed earlier to those selected under the earlier examination, with the result those appointed to the service later in time are made senior to those appointed in service earlier in time in accordance with Rule 22. This causes heart burning and other complications. In order to avoid these complications it is necessary that every effort should be made to appoint the successful candidates of a particular examination before any candidate of subsequent examination is appointed. If for some reason this is not possible the State Government and the High Court both should consider the desirability of amending the Rule 22 to ensure that the length of service rendered by an officer is respected. In the result, Civil Appeal No. 4023 of 1982 and Civil Appeal No. 4024 of 1982 and allowed. Civil No. 3736 of 1982 is dismissed. Writ Petition No. 4636 of 1982 and Writ Petition No. 13047 of 1985 are dismissed Writ Petition No. 128 10 of 1985 and Transfer Case No. 15 of 1987 (transferred petition) are allowed partly. There will be no order as to costs in these cases.

% These appeals and writ petitions raised common questions of law relating to the determination of seniority of Munsif appointed in the Uttar Pradesh Nyayik Seva as a result of competitive Examinations of 1970, 1972 and 1973 held under the Uttar Pradesh Civil Service (Judicial Branch) Rules, 1951 (the Rules). Public Service Commission issued a notification dated September 3, 1970, for recruitment to 85 posts of Munsifs. In the examination held for the purpose, 294 out of 918 candidates qualified in the written test and were called for viva voce test, and the Commission submitted to the State Government a list of 46 approved candidates list of 1970 examination for appointment to the service. The Government requested the Commission to recommend some more candidates as there was a shortage of Munsifs, while suggesting that the minimum of 40 per cent marks in the aggregate be reduced to 35 per cent. The Commission forwarded another list of 33 candidates the IInd list, comprising the candidates who had secured 35 per cent marks in the aggregate and 35 percent, in the Viva Voce. All the 79 candidates of the two lists above said were appointed to service between May, 1972, and June, 1973, and in July, 1973, a notification was issued, determining inter seniority of the 79 persons appointed on the basis of the 1970 examination in accordance with their position in the lists prepared by the Commission under rule 19 of the Rules. Meanwhile, the Public Service Commission held another competitive examination the 1972 examination for appointments to 150 posts of Munsifs, and forwarded a list of 150 successful candidates to the Government for appointment under Rule 19 above mentioned, and they were so appointed between 1975 and 1977. The State Government, in view of the shortage of the Munsifs 795 as also the amendment of rule 19 in pursuance whereof it was no longer necessary for a candidate to qualify independently in the viva voce, requested the Commission to reconsider the result of the examination of 1967, 1968, 1969 and 1970 and approve all those candidates for appointment who might have obtained 40 per cent or more marks in the aggregate even if they might have failed to secure the minimum marks in the viva voce tests. The Commission refused to consider this proposal as the minimum marks prescribed by it under the then existing proviso to Rule 19 could not be ignored. The Government thereupon constituted a high level committee comprising the Chief Minister, the Chief Justice of the High Court and the Chairman of the Public Service Commission to consider this question, and the Committee decided that the Commission be requested to recommend candidates of the 1967, 1968, 1969 and 1970 examinations as above mentioned. The Government wrote to the commission again for the purpose, conveying to it the decision of the High level committee above said, and asking it to forward the applications and the marks of the unsuccessful candidates of the Examinations above mentioned. The Commission could forward a list of 37 such candidates of the 1970 Examination only the IIIrd list to the Government. The IIlrd list contained the names of Refiquddin and 36 others, the "unplaced candidates" of the 1970 Examinations, unsuccessful due to failure in the viva voce. Thereupon, the Government issued a notification, appointing 21 of the 37 candidates above mentioned as Munsifs, the remaining 16 having already again appeared in the 1972 Examination and selected and appointed to the service. Upon a further request by the Government for 16 more candidates, the Commission forwarded another list of 16 candidates who had appeared in the l 972 Examination. In March, 1977, the State Government published a seniority list of the successful candidates of the 1970 examination, whereupon, the "unplaced candidates" of the IIIrd list of the 1970 Examination submitted a representation for determination of their seniority under Rule 22 of the Rules on the footing that they were recruited in pursuance of the 1970 Examination, and, therefore, they were entitled to seniority as candidates of the examination held in 1970 irrespective of their appointment being made in 1975, thereby claiming seniority over those who had been recruited in pursuance of the 1972 Examination and those who had been recruited earlier to them in pursuance of the 1970 Examination and the Ist and IInd lists of the 1970 Examination. The representation was rejected by the High Court (administratively) and the Government. Then, Rafiquddin and 16 other "unplaced candidates" filed a writ petition in the High Court. The High Court allowed the writ peti 796 tion on the footing that the "unplaced candidates" were appointed on the basis of the result of the 1970 Examination, quashed the seniority list and issued directions for the preparation of the seniority list of the candidates of the 1970 Examination afresh in accordance with rule 22, read with rule 19 of the rules and for confirmation and promotion of the petitioners in accordance with the seniority list so drawn up. The State of Uttar Pradesh appealed to this Court against the decision of the High Court. Appellants Sushil Kumar Srivastava and others also preferred an appeal to this Court against the above said decision of the High Court. D.P. Shukla and three other unsuccessful candidates of the 1970 Examination preferred an appeal to this Court against the judgment of the High Court dismissing the writ petition filed by them, raising the grievance that they were discriminated as they had not been appointed, and instead, 37 candidates "belonging to the lIlrd list" had been appointed although they had obtained lower marks. Chandra Prakash Agrawal, an unsuccessful candidate at the 1970 Examination, Bled a writ petition in this Court, challenging the appointments of those who had secured less than 40 per cent marks in the aggregate. Sushil Chand Srivastava, a member of the service appointed in pursuance of the 1972 Examination filed a writ petition in this Court, challenging the validity of the appointments of the "unplaced candidates" of the 1970 Examination belonging to the IIIrd list which included Kafiquddin and others, on the ground that their appointment was illegal and, therefore, they could not be treated as senior to him. R.P. Lavaniya, a member of the service recruited in pursuance of the 1973 Examination filed a writ petition in this Court, claiming seniority over respondents 3 to 15 in the writ petition, recruited in pursuance of the 1972 Examination and appointed in service after the petitioners appointment. P.N. Parasher and 11 others, recruited in pursuance of the 1972 Examination, filed a writ petition in the High Court, challenging the seniority list prepared in pursuance of the judgment of the High Court in the writ petition filed by Rafiquddin and others, afore mentioned on the ground that the "unplaced candidates" of the 1970 Examination were not entitled to seniority over the candidates of the 1972 Examina 797 tion, as they had been appointed to service earlier in time, that writ petition was transferred to this Court as the Transferred case. Allowing the appeal filed by the State of U.P. and the appeal preferred by Sushil Kumar Srivastava and others and allowing in part the writ petition of Sushil Chand Srivastava and the Transferred case of P.N. Parashar and others, and dismissing the appeal of D.P. Shukla and others, and the writ petition of Chandra Prakash Agarwal and the writ petition of R.P. Lavaniya, the Court. ^ HELD: The High Court completely misconceived the relevant Rules, while rendering the judgment in the writ petition filed by the "unplaced candidates" Rafiquddin and 16 others in total disregard of the facts. It committed a serious error in applying the principles of natural justice to a competitive examination. [820E] The Rules entrust the Public Service Commission with the duty of holding competitive examinations and recommending the names of the suitable candidates for appointment to the service on the basis of the proficiency shown by the candidates. Rule 19 provided that the list of the selected candidates should be arranged in order of merit on the basis of the aggregate marks of each candidate in the written as well as viva voce tests. In pursuance of clause (i) to the proviso to rule 19, the commission had the power to fix minimum aggregate marks in the written test. Similarly, clause (ii) of the proviso conferred power on the Commission to fix the minimum marks for the viva voce to judge the suitability of the candidates for the service. The scheme underlying rule 19 and the proviso there to made it apparent that the obtaining of the minimum aggregate marks in the written test and the viva voce test, was the sine qua non before the Commission could make its recommendations in favour of the candidates for appointment to the service. It is manifest that only those candidates could be appointed to the service who were included in the list prepared by the Commission under rule 19. Appointments to the service are made from the list forwarded by the Commission to the State Government. Seniority in the service is determined on the basis of the year of the examination irrespective of the date of the appointment and the inter se seniority of the candidates recruited is determined on the basis of their ranking in the merit list. Seniority of a candidate appointed to the service would depend upon the result of the competitive examination and his position in the list prepared under rule 19. The claim to seniority on the basis of the year of competitive examination as contemplated by rule 22 is available only to those candidates who are approved by the Commission on the basis of H 798 their marks in the written and viva voce tests. The commission alone had the power to prescribe the minimum marks in the viva voce test for judging the suitability of a candidate for the service. That is the clear meaning of the words in the proviso to rule 19. [814B H] In the instant case, the. commission had fixed 35 per cent minimum marks for the viva voce test. The viva voce test is a well recognised method of judging the suitability of a candidate for appointment to public services. There is no constitutional, legal infirmity in the provision of clause (ii) of the proviso to rule 19, conferring power on the commission to fix minimum marks for the viva voce test, as aforesaid, and so long as the clause (ii) remained in force, the Commission had that power. Even if a candidate had obtained higher aggregate marks in the written and viva voce test, his name could not be included in the list prepared by the Commission under rule 19. None of the "unplaced candidates" of the 1970 examination (those included in the IIIrd list) had secured minimum marks of 35 per cent in the viva voce test, and for that reason they were not approved by the Commission. The appointments of the "unplaced candidates" made in pursuance of the decision of the high level committee are not countenanced by the rules. There is no escape for the conclusion that the "unplaced candidates" were appointed to service on the basis of the result of the competitive examination of 1970. Their appointments were made in breach of the rules. It is well settled that where recruitment to service is regulated by the statutory rules, the recruitment must be made in accordance with those rules, and any appointment made in breach of the rules, would be illegal. The appointments of the 21 "unplaced candidates" made out of the third list were illegal as they were made in violation of the provisions of the rules. The high level committee, even though constituted by highly placed persons, had no authority in law to take the decision it did as above said, as the rules do no contemplate any such committee and the decision taken by the committee could not be implemented. The committee had no authority in law to disregard the rules and direct the Commission, which is a constitutional and independent authority, not sub servient to the directions of the Government, to make a recommendation to the Government in c; favour of the unsuccessful candidates by disregarding the minimum marks prescribed for the viva voce test. Its view that after the amendment of the rule 19, the minimum qualifying marks fixed for viva voce could be ignored, was wholly wrong. Rule 19 was amended in January 1972, but before that the 1970 examination had already been held, and the amendment was not retrospective. Even if the Commission had made recommendations in favour of the "unplaced candidates" under 799 the directions of the government, the appointments of the said candidates would have been illegal as made in violation of the rules. And there was no justification for the appointments of the unsuccessful candidates in 1975 because by then, the result of the 1972 examination had been announced and duly selected candidates were available. [816F H; 822D H; 823C DJ There is no express provision in the rules as to for what period the list prepared under rule 19 can be utilised for making appointments to the service. In the absence of any provision in the rules, a reasonable period must be followed during which the appointments on the basis of the result of a particular examination should be made. The list prepared by the Commission on the basis of the competitive examination of a particular year could be utilized by the Government for making appointments before the declaration of the result of the subsequent examination. If selected candidates are available for appointment on the basis of the competitive examinations of subsequent years, it would be unreasonable and unjust to revise the list of earlier examination by changing norms to fill up the vacancies, as that would adversely effect the rights of those selected at the subsequent examination in the matters relating to their seniority under rule 22. The 1970 examination could not be utilised as a perennial source or an exhaustible reservoir for making appointments indefinitely. The result of a particular examination must come to an end at some point of time, like a "dead ball" in cricket. The practice of revising the list prepared by the Commission under rule 19 at the behest of the government by lowering down fixed standards and norms, is subversive of the rule of law. This practice is fraught with dangers of favouritism and nepotism and it would open back door entry to the service. Once the result of the subsequent examination of 1972 was declared, the Commission could not revise the list of approved candidates of 1970 examination prepared by it under rule 19 at the behest of the Government by lowering down the standard_ fixed by it. The procedure adopted in appointing the unplaced candidates of 1970 examination was unauthorised by law and it practised discrimination in violation of Articles 14 and 16 of the Constitution. [824B H; 826H] The "unplaced candidates" were appointed to the service in breach of the rules and they form a separate class. They cannot be equated with those appointed from the first and the second lists of the 1970 examination as their appointments were made on the recommendation of the Commission. Similarly, the candidates appointed to the service on the basis of the result of the competitive examination of 1972 before the "unPlaced candidates" were appointed, formed a separate 800 class as they were also appointed in accordance with the rules. The "unplaced candidates" could not claim seniority over them on the basis of rule 22, as their appointments were not made on the basis of the list approved by the Commission under rule 19. [827A C] Even though the 21 "unplaced candidates" of 1970 examination have been found to have been appointed to the service illegally in breach of the rules, yet the judgments and others passed by them are not rendered invalid; they were appointed by competent authority with the concurrence of the High Court. They have been working in the judicial service all these years and some of them have been promoted also; they have performed their functions as de facto judicial officers. The judgments and orders of a de facto judge cannot be challenged on the ground of his ineligibility for appointment. Keeping in view the period of 12 years that has elapsed, the Court did not propose to strike down the appointments of the "unplaced candidates". Having regard to all the facts and circumstances, it would be just and proper to assign seniority to the "unplaced candidates" of the 1970 examination at the bottom of the list of the 1972 candidates. The 16 "unplaced candidates" out of the total of 37, who were successful in the 1972 examination and were approved and included by the Commission in the list prepared under rule 19, are entitled to seniority of 1972 examination on the basis of their positions in the merit list of that examination. [827D G; 828F H] The appeal of the State of U.P. and the appeal of Sushil Kumar Srivastava and others allowed. Judgment of the High Court set aside. The High Court and State Government shall determine the seniority of the 21 "upheld candidates" as directed by the Court. [829F G] In the Appeal filed by D.P. Shukla and others, directed against another judgment of the High Court, the view of the High Court was consistent with the view of this Court. The appellants had appeared at the 1970 examination but were unsuccessful as they had failed to secure 35 per cent minimum marks at the viva voce test, although they had secured higher marks in the aggregate than those selected and appointed. They had challenged the selection made in pursuance of the 1970 examination. [830A B] In the writ petition filed in this Court by Chandra Prakash Aggarwal, as the petitioner had failed to obtain the minimum marks prescribed for the viva voce test although he had obtained more than 40 per cent marks in the aggregate, he could not be granted the relief of appointment to the service. He was also, 801 disentitled to any relief on the ground of inordinate delay, there being no plausible explanation for the delay in . challenging the validity of the 1970 examination in 1982. L830C D] In the writ petition filed in this Court by Sushil Chand Srivastava and in the transferred case of P.N. Parasher and others, the petitioners, recruited to the service on the basis of the 1972 examination, were aggrieved by the decision of the High Court in Rafiquddin 's case as their seniority was affected adversely. This Court has already taken the view that the "unplaced candidates" of the 1970 examination could not be senior to the candidates appointed as a result of the 1972 examination, and the petitioners were covered by that decision of the Court to get relief to that extent. [830G] In the writ petition filed in this Court by R.P. Lavania, the petitioner was appointed to the service in November, 1976 on the basis of the result of the 1973 examination. His grievance was that the respondents Nos. 3 to 15 in the petition had been shown senior to him; although they had been appointed later in time on the basis of the 1972 examination, and that the selection and appointment of the said respondents were against the rules and they were not entitled to seniority over him as he was a regularly selected candidate. There was no merit in the petitioner 's case. Rule 22 directs that seniority shall be determined on the basis of the year of examination, which means that a person recruited to the service in pursuance of the result of a particular year of examination would rank senior to a candidate who is recruited in pursuance of the result of a subsequent year of examination, although he might have been actually appointed earlier in time, as, after the selection of the candidates, several formalities, like medical examination, character and antecedents verification, etc., are followed before the appointments are made under rule 21. Many a time, this process of formalities causes delay in the making of the actual appointment, with the result that sometimes persons selected on the basis of subsequent examination are appointed before the successful candidates of the earlier examination. But under rule 22, the latter shall be senior to the former, irrespective of the date of appointment. The petitioner was appointed in the service on the basis of the result of the 1973 examination while the respondents Nos. 3 to 15 were recruited to service on the basis of the result of the 1972 examination. Therefore, under rule 22, the validity of which has not been challenged, the respondents Nos. 3 to 15 are entitled to be senior to the petitioner. There was no illegality in the appointments of the respondents 802 Nos. 3 to 15. Their appointments in the service were made by the A State Government on the recommendation of the Public Service Commission made under Rule 19, as they had obtained the requisite aggregate marks in the written and the viva voce tests. They were appointed in accordance with the rules and were entitled to seniority in terms of rule 22. [831 A H] The Public Service Commission has been changing the norms fixed by it at the behest of the Government after the declaration of the results. The Commission is an independent, expert body. It has to act in an independent manner. It may consult the State Government and the High Court in prescribing the norms for judging the suitability of the candidates if no norms are prescribed in the Rules. Once the Commission determines the norms and makes selection on the conclusion of a competitive examination and submits the list of the suitable candidates to the Government, it should not re open the selection by lowering down the norms at the instance of the Government. If the practice of revising the results of competitive examinations by changing the norms is followed there will be confusion and the people will loss faith in the institution of the Public Service Commission and the authenticity of the selections. The Commission should take a firm stand in these matters, uninfluenced by the directions of the State Government unsupported by the Rules. [833A D] (ii) The practice of appointing a retired Judge of the High Court as an expert to assist the Commission in making selections for appointments to the judicial service, is not desirable. A sitting Judge of the High Court should be nominated by the Chief Justice of the State to participate in the interviews as an expert; he would be in a better position to give advice to the Commission in the selection of suitable candidates and his advice would be binding on the Commission unless there are strong and cogent reasons for not accepting such advice, which must be recorded in writing by the Chairman and Members of the Commission, as observed by a Constitution Bench of this Court in A. K. Yadav vs State of Haryana, ; The Constitution Bench had issued directions to the Public Service Commission of every state to follow this direction, but it appears that in the State of U.P., this direction is not being followed. In future, the selections for appointments to the judicial service shall be made by the Commission on the expert advice of a sitting judge of the High Court nominated by the Chief Justice. [833E H;834A] (iii) It has been noticed that generally, there is a considerable 803 interregnum between the holding of the examination and the appointments of the selected candidates in these cases, no system was followed in making the appointments, as some of the candidates selected in the subsequent examination were appointed earlier than those selected in the earlier examination, and those appointed later in time are made senior to those appointed earlier in time under Rule 22. This causes heart burning and other complications. To avoid this situation, it is necessary that every effort should be made to appoint the successful candidates of a particular examination before any candidate of a subsequent examination is appointed. [834B D] K.N. Chandrasekhra & Ors. vs State of Mysore and Ors. , A.I.R. ; T.N. Manjula Devi vs State of Karnataka, [1982] Labour and Industrial Cases, 759; Durga Charan Misra vs State of orissa, W.P. 1123 of 1986, decided on 27.8.1987; Lila Dhar vs State of Rajasthan, [1982] 1 S.C.R. 320; A.K. Yadav vs State of Haryana, [1985] 4 S.C.C. 417; Umash Chandra Shukla vs Union of India & Ors. , ; ; Shitla Prasad Shukla vs State of U.P. & Ors., [1986] Supp. S.C.C. 185 and Achanti Sreenivasa Rao & Ors. vs State of Andhra Pradesh, referred to.

Appeal No. 2053 of 1971. Appeal by special leave from the Judgment & Order dated the 8th July, 1971 of the Bombay High Court in S.C.A. No. 1346/68. M. C. Bhandare, P. H. Parekh and section Bhandare, for the appellant. The Judgment of the Court was delivered by SARKARIA, J. Whether the difference of 10 per cent between an Industrial Company and other Companies in the levy of Income tax provided in the Finance Act, 1966 is to be construed a "rebate" or "relief" in the payment of any direct tax, for the development of an industry for the purposes of section 7(e) of the , (for short, the Bonus Act) is the short question that falls to be answered in this appeal by special leave. The appellant is a Private Ltd. Company. it manufactures automobile ancillaries and other goods in its Factory at Bombay. It employs about 170 workmen. The workmen demanded bonus for the year 1964 65. Their demand was not met by the Company. Conciliation proceedings before the Conciliation Officer having failed, the dispute was submitted to the Government which by its Order, dated May 2, 1967 referred the same for adjudication to the Industrial Tribunal. One of the points mooted before the Tribunal was, whether in calculating the available surplus, the direct tax payable by the Company was deductible at the rate of 55 per cent or 65 per cent. The case of the Mazdoor Saneh (Respondent No. 1) was that the rate should be 55 per cent as the Company was paying the tax at the rate As against this, the Company contended that it was entitled to deduct as per section 7(e) of the Bonus Act, direct tax at the normal rate of 65 per cent and not at 55 per cent which was only a confessional levy amounting to a "relief" for the purpose of development. The Tribunal accepted the contention of the Company. After referring to the speech of the Finance Minister on the Budget of 196667, the Tribunal held: assessed to income tax at the rate of 65 per cent, those engaged in industrial undertakings have been assessed at the concessional rate of 55 per cent, as a measure of rendering assistance to their growth. Such a concession would, unquestionably amount to relief for the purpose of development as contemplated by Section 7(e) of the Act. " Aggrieved, the Mazdoor Sangh impugned the Tribunal 's Award, dated 29 2 1968, by a Writ Petition under Article 227 of the Con 544 stitution before the High Court of Bombay. The High Court held that the Company being an Industrial Company, was liable to pay tax under the Finance Act, 1966 at the rate of 55% only on its total income after deducting depreciation. Therefore it could not claim deduction at a rate higher than 55% in calculating the available surplus. In the result, the High Court set aside the Award and remitted the case to the Tribunal for further disposal in accordance with law. Hence this appeal by the Company. Broadly, the scheme of the Bonus Act is this : At first, the gross profits derived by an employer from an establishment are calculated in the manner specified in the First Schedule, or the Second Schedule, whichever may be applicable (section 4). On the basis of such gross profits, the available surplus for the particular accounting year is computed. This is done by deducting therefrom the sums referred to in Section 6. According to Clause (c) of Section 6, one of the sums so deductible is: "Subject to the provisions of Section 7, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year". Section 7, to which section 6(c) is subject, provides how for the purposes of the Act, the direct tax payable by the employer is to be calculated. Clause (e) of Section 7 is material. It runs thus : "no account shall be taken of any rebate (other than development rebate or development allowance) or credit or relief or deduction (not hereinbefore mentioned in section) in the payment of any direct tax allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act, for the development of any industry". The rates of income tax applicable to Private Ltd. Companies tinder Paragraph F, Part I of the First Schedule fixed by the Finance Act, 1966, are as follows : 1. In the case of a domestic Company(A) (1). (2) where the Company is not a company in which the public are substantially interested. (i) in the case of an industrial Company (1) on so much of the total income as does not exceed Rs. 10,00,000 55 per cent. (2) on the balance, if any of the total income 60 per cent. (ii) in any other case 65 per cent of the total income". It is not disputed that the Company being an industrial Company with total income for the relevant year, not exceeding Rs. 10,00,900,, 545 the rate of tax under the above Paragaph 1(A) (2) (i), applicable to it was 55 per cent and not 65 per cent of the total income. However, Mr. Bhandare 's contention is that this was only a concessional rate and not the normal rate which was prescribed under Clause (ii) of the above Paragraph 1(A) (2). The point pressed into argument is that this ten per cent concession in the tax rate was given to Industrial Companies with a view to promote development of Industry and, as such, must be deemed to be a "relief" or "rebate" in the payment of direct tax of the kind contemplated by Section 7(e) of the Act. Reliance for this contention has been placed on the speech of the Finance Minister on the Budget of 1966 67, wherein he proposed to provide "certain reliefs" which he considered "necessary for providing a suitable climate of growth", and, in that context, described the rate of 55% tax on Industrial Companies as a "concessional rate". We are afraid what the Finance Minister said in his speech cannot be imported into this case and used for the construction of Clause (e) of Section 7. The language of that provision is manifestly clear and unequivocal. It has to be construed as it stands, according to its plain grammatical sense without addition or deletion of any words. As a general principle of interpretation, where the words of a statute are plain, precise and unambiguous, the intention of the Legislature is to be gathered from the language of the statute itself and no external evidence such as Parliamentary Debates, Reports of the Committees of the Legislature or even the statement made by the Minister on the introduction of a measure or by the framers of the Act is admissible to construe those words. It is only where a statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more than one meaning or shades of meaning, that external evidence as to the evils, if any, which the statute was intended to remedy, or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertain ing the object which the Legislature had in view in using the words in question. In the case before us, the language of Section 7(e) is crystal clear and self contained. It indicates in unmistakable terms that the 'rebate or relief ' in the payment of any direct tax in order to fall within the purview of this clause must satisfy two conditions, viz., (i) that it must be a rebate or relief "allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act", and further, (ii) that it must be a relief or rebate for the development of any Industry. In the present case, condition (i) is lack ing. The Finance Act, 1966, does not say that this difference of 10per cent in the rates of tax applicable to an Industrial Company and any other Company is to be deemed to be a rebate or relief for the development of Industry. Nor has it been shown that this difference in the rates is allowed as a rebate or relief under any other extant law relating to direct taxes. 546 The High Court was, therefore, right in holding that it was not ,permissible to use the speech of the Finance Minister to construe the clear language of the statute,. For the forgoing reasons the question posed above is answered in the negative and the appeal is dismissed. As regards the costs, the delay in payment of the bonus caused by the pendency of this appeal has been amply compensated vide this Court 's order dated February 17, 1972, which is to this effect "The order of ex parte stay is made absolute on the condition that the petitioner appellant shall pay six percent interest on any amount that is found payable by the appellant to the respondent workmen from the date the award become enforceable till the disposal of the appeal in this Court, in case the appeal fails in this Court. " The appeal has been heard ex parte, we therefore make no order as to costs. P.B.R. Appeal dismissed.

Section 7 of the Bonus Act provides as to how the direct tax payable by an employer is to be calculated for the purpose of computing the available surplus. Clause (e) of section 7 enacts that no account shall be taken of any 'rebate ' or 'relief ' or deduction in the payment of any direct tax allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act for the development of any industry. in the case of an industrial company, which is not a company in which public ,arc substantially interested, the Finance Act. 1966 fixed the rate of income tax at 55% on so much of the total income as did not exceed Rs. ten lakhs, on the balance, if any, of the total income 60% and 65% in the case of any other ,company. In a dispute between its employees and the appellant, which is an industrial company the latter contended that for the purpose of computing the available surplus it was entitled to deduct direct tax at 65% and not 55% which was only a confessional levy amounting to a 'relief ' for the purpose of development. The Tribunal accepted the contention of the appellant. The High Court allowed the respondent 's writ petition under article 227 of the Constitution holding that the company being an industrial company could not claim deduction at a rate higher than 55% in calculating the available surplus. On appeal it was contended that the 10% concession in the rate was given to industrial companies with a view to promote development of industry and as such must be deemed to be a 'relief ' or 'rebate ' in be payment of direct tax contemplated by section 7(e) of the Bonus Act. Reliance for this had been placed on the speech of the Finance Minister on the budget for the year 1966 67. Dismissing the appeal, HELD : (1) The company being an industrial company with total income not exceeding rupees ten lakhs the rate of tax under paragraph 1(A)(2)(i) of the Finance Act. 1966 applicable to it was 55% and not 65% of the total income. [544H 545A] (2) The 'rebate or relief ' in the payment of any direct tax, in order to fall within the purview of section 7(e) of Bonus Act. must be a rebate or relief "allowed under any law for the time being in force relating. to direct taxes or under the relevant Finance Act. for the development of any industry" which is one of the conditions to be satisfied. In the present case it did not satisfy this condition. The Finance Act, 1966 did not say that this difference of 10% in the rate of tax applicable to an industrial company and any other company is to be deemed to be a rebate or relief for the development of industry. No, has it been shown that this difference in the rates is allowed as a rebate or relief under any other extant law relating to direct taxes. [545F H] 3 (a) It was not permissible to use the speech of the Finance Minister to construe the clear language of the statute. [545C D] (b) As a general principle of interpretation, where the words of a statute are ,plain, precise and unambiguous the intention of the Legislature has to be gathered from the language of the statute itself and no external evidence such as Parliamentary debate , Reports of the Committees of the Legislature or even the statement made by the Minister on the introduction of a measure or by the framers of the Act is admissible to construe those words. It is only where a statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more 543 than one meaning or shades of meaning that external evidence as to the evils. if any. which the statute was intended to remedy. or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertain ing the object which the Legislature had in view in using the words in question. [545D F]

ivil Appeal No. 1043 of 1990. From the Judgment and Order dated 10.8.1989 of the Bombay High Court in C.R.A. NO. 521 of 1985. V.A. Bobde, S.D. Mudaliar. Mrs. Ranjana Bobde and C.K. Ratnaparkhi for the Appellants. V.P. Salve, and Ms. Bina Gupta for the Respondent. The Judgment of the Court was delivered by VERMA, J. Special Leave granted. The short question involved is the maintainability of the suit which gives rise to this appeal. The appellants contend mat the Suit is not maintainable even on the plaint averments. The Trial Court held the suit to be maintainable and the High Court has dismissed the appellants ' revision affirming that view. Hence this appeal by special leave. The appellants are the legal representatives of Motilal who purchased the disputed property, namely, 'Goyal Talkies ' at Kamptee in the year 1946. The said Motilal entered into a partnership on 31.12.1953 with respondent Ratanlal repre senting the joint family firm "M,s. Ratanlal Damdoolal and Bros." for the purpose of running the cinema business in 'Goyal Talkies '. Some disputes having arisen between the parties, the said Motilal together with his wife and chil dren filed Civil Suit No. 19A of 1955 on 4.8.1955 in the Court of Civil Judge, Class I, Nagput, against respondent Ratanlal as defendant No. 1, the firm "M/s. Damdoolal and Bros." as defendant No. 2 and one Puranmal as defendant No. 3. The suit was for the dissolution of partnership, rendi tion of accounts and ancillary reliefs. On discovery of the misdescription of defendant No. 2 firm, an application was made by the plaintiff for correction of that misdescription. The misdescription being obvious, the Trial Court allowed the plaintiff 's application on 19.8.1955 permitting defend ant No. 2 firm to be correctly described as "M/s. Ratanlal Damdoolal and Bros." instead of "M/s. Damdoolal and Bros." It appears that the correction even though permitted was 175 not actually incorporated in the plaint. However, the par ties were not misled in any manner by the misdescription of defendant No. 2 made initially in the plaint which is evi dent from the fact that defendant No. I Ratanlal who filed the separate written statement in the suit on behalf of defendant No. 2 also correctly described defendant No. 2 as "Ratanlal Damdoolal and Bros." This suit was compromised between the parties and a compromise petition dated February 20, 1956 signed by the plaintiff, Motilal, Ratanlal for himself as defendant No. 1 and also on behalf of defendant No. 2 firm, and the counsel for defendant Nos. 1 and 2 was filed in the Trial Court. This compromise was recorded by the Court on 5.3.1956 after the statements of defendant No.1 Ratanlal and the counsel for defendant No. 2 firm were recorded accepting the compromise. One of the agreed terms was that defendant No. 3 Puranmal should be discharged from the suit apparently because he had no interest in the suit. According to the terms of the compromise, plaintiff was to pay to defendant Nos. 1 and 2 a sum of Rs.15,700 in full satisfaction of their claim subject to final accounting, which included the sum of Rs.2,600 paid to Puranmal by defendant Nos. 1 and 2. It was also agreed that on payment of this amount by the plaintiff to defendant Nos. 1 and 2 within the specified period, the partnership would be deemed to be dissolved and that defendant Nos. 1 and 2 gave up all their rights including the interest acquired by them from defendant No. 3, Puranmal under the sale deed executed in their favour. It was agreed that the plaintiff would be entitled to possession of the talkies immediately on payment of the amount due to defendant Nos. 1 and 2. The Receiver Shri K.S. Mishra Advocate, was required to act in terms of the compromise between the parties which required confirma tion of accounts from the accountbooks of the partnership and thereafter distribution of the surplus between the plaintiff and defendant Nos. 1 and 2. The plaintiff paid this sum of Rs.15,700 on 5.3.1956 well within the specified period; the receiver rendered accounts on 19.3.1956 and an application for correction was made on 3.4.1956. It may be mentioned that full compliance having been made by the plaintiff on 5.3. 1956, the receiver gave possession of the Talkies to the plaintiff on 5.3. 1956 according to the compromise since the Only thing remaining to be done thereafter was to refund to the plaintiff the amount of Rs.5,470 paid in excess by plaintiff to defendant Nos. 1 and 2. Accordingly, on 16.11.1959 the Court passed the final decree in the suit stating that the partnership stood dissolved with effect from 27.4.1959 and the defendant Nos. 1 and 2 were directed to refund to the plaintiff the amount of Rs.5,470 which was the excess amount paid by the plaintiff to them. 176 Notwithstanding the above facts, defendant Nos. 1 and 2 filed an appeal against the final decree dated 16.11.1959 in the Court of the Extra Assistant Judge, Nagpur which was C.A. No. 413 of 1962 decided on 27.12. Thereafter, a second appeal No. 293 of 1963 was also filed by these de fendants in the High Court which too was dismissed on 2.12.1972. The final decree dated 16.11.1959 based on the compromise which was fully satisfied become final inasmuch as the defendants did not challenge the same by a further appeal to this Court. Thereafter, Civil Suit No. 1699 of 1980 in the Court of Civil Judge, Senior Division, Nagpur, was filed by respond ent Ratanlal against the petitioners who are the legal representatives of the aforesaid Motilal assailing the above consent decree after taking the entire benefit thereunder. The reliefs claimed in this suit are for a declaration that the aforesaid final decree dated 16.11. 1959 passed on the basis of the order dated 5.3.1956 in Civil Suit No. 19A of 1955 by the Civil Judge, Senior Division, Nagpur, is a nullity; that the partnership under the partnership deed dated 31.12.1953 between the said Ratanlal and Motilal continues to subsist; that Ratanlal is entitled to posses sion of the said Goyal Talkies; and the other ancillary reliefs. This suit was contested by the petitioners, inter alia on the ground that it was barred by res judicata by the earlier adjudication between the parties and also that it was not maintainable. It would suffice to say that as a result of the High Court 's direction, the Trial Court framed preliminary issue regarding maintainability of the suit and by its order dated 15.4.1985, it held the suit to be main tainable. On behalf of the petitioners the suit was claimed to be barred also by virtue of Rule 3A of Order 23, C.P.C. The Trial Court rejected these contentions and held the suit to be maintainable. The petitioners then preferred a Civil Revision in the High Court which has been dismissed by the Order dated 10.8.1989. Hence this appeal by special leave. The contention of Shri V.A. Bobde, learned counsel for the appellant is that the suit is barred by virtue of Rule 3A of Order 23, C.P.C. and even otherwise the plaint aver ments do not disclose any cause of action in order to raise a triable issue. He also contended that even if Rule 3A inserted in Order 23, C.P.C. by the C.P.C. Amendment Act, 1976 with effect from 1.2.1977 does not apply to the present suit challenging the decree passed prior to the amendment, this suit is barred also in accordance with the unamended provision existing earlier. In reply, Shri V.P. Salve, learned counsel for the respondent contended that Rule 3A of Order 23, C.P.C. has no application since the decree as sailed in the suit is of a date much prior to insertion of 177 Rule 3A by amendment with effect from 1.2. He also contended that the question of examining the frame of the suit to determine its maintainability on any other ground does not arise since the petitioners case was based on the bar under Order 23, Rule 3A, C.P.C., which too was an objec tion raised after the filing of the written statement in which the plea of res judicata had been taken. However, in all fairness Shri Salve made no attempt to contend that the suit as framed raises any triable issue on the basis of the only grounds on which the decree dated 16.11.1959 is alleged to be a nullity. He urged only two additional grounds, not pleaded in the existing plaint, which were raised unsuccess fully on behalf of the present respondent in the First Appeal and the Second Appeal against the compromise decree to contend that the suit is triable. He also urged that no specific objection for rejection of the plaint under Order 7 Rule 11 C.P.C. was taken earlier and, therefore, the matter be remanded for a fresh consideration on this basis. To avoid protracting this litigation any longer, we gave opportunity to learned counsel for the respondent to prepare the case on this point. Shri Salve then filed an application for amendment of the plaint on the next day in any attempt to plead the additional grounds on which alone he claimed the suit to be triable. We may first dispose of the application for amendment to the plaint filed by Shri Salve on January 12, 1990 during the course of hearing of the appeal. We do not find any ground to allow this application which apart from being highly belated, is clearly an after thought for the obvious purpose of averting the inevitable consequence of rejection of the plaint on the ground that it does not disclose any cause of action or raise any triable issue. Moreover, the proposed amendments in the plaint, as summarised by Shri Salve, are to raise two grounds which are concluded by the earlier adjudication ending with dismissal of Ratanlal 's Second Appeal against the impugned decree. The first is the consequence of rejection of the plaint under Order 7, Rule 11, C.P.C. in the earlier suit on 26.3.1959 and its revival on payment of court fee by plaintiff, Motilal, in terms of that order itself. It is sufficient to mention that the High Court 's order dismissing the Second Appeal arising out of that decree considers and rejects this argument and that order has become final between the parties since it was not challenged thereafter. The second point relates to delivery of possession of the Talkies on 5.3.1956 to plaintiff, Motilal, which is alleged to have been made under a wrong procedure. The facts narrated above clearly indicate that delivery of possession by the 178 Receiver, Shri K.S. Mishra, Advocate, to plaintiff, Motilal, was in pursuance of the Court 's order dated 5.3.1956 after plaintiff Motilal had already deposited the sum of Rs.15,700 which was really in excess of the amount required to be paid by the plaintiff, Motilal, to. defendant Nos. 1 and 2 re sulting in subsequent refund of Rs.5,470 to plaintiff and the express compromise between parties which was accepted by Ratanlal in his statement recorded by court on 22.2. This contention also was rejected in the earlier adjudica tion ending with the High Court 's dismissal of the Second Appeal which has become final. Moreover, this appeal is not against that decision of the High Court. There is no ground to allow the belated attempt to amend the plaint for taking these grounds. The application for amendment is, therefore, rejected. We do not consider it necessary to decide the applica bility of Rule 3A of Order 23, C.P.C. to the present suit since the matter can be disposed of even otherwise. The plaint averments specify the grounds on which the decree dated 16.11. 1959 is alleged to be nullity. The question is: whether any of these grounds raises a triable issue in the suit or in other words does the plaint disclose any cause of action? The specific case of the respondent as clearly mentioned in Para 3 of the impunged order dated 10.8. 1989 of the High Court is as under: "The plaintiff has never claimed that some fraud, coercion or misrepresentation is played. On the other hand, he says that due to the lapses while deciding the matter, decree passed by the Court below has become a nullity. It is, therefore, clear that the respondent/plaintiff does not challenge validity of the decree dated 16.11.1959 on the ground of fraud, coercion or misrepresentation but merely on the basis of lapses in deciding the earlier suit which have been specifically mentioned in para 6 of the plaint. It is, therefore, only on these limited grounds that the question of maintainability of the present suit has to be decided. We shall, therefore, now refer to the grounds mentioned in para 6 of the plaint which alone are relied on to dis close a cause of action for the suit. The first ground of nullity averred in para 6 of the plaint is that the decree was passed against a non existent person "M/s. Damdoolal and Bros." It is not the respondent 's case that "M/s. Dam doolal and Bros." is a legal entity distinct from "M/s. Ratanla Damdoolal and Bros." so that the decree was against another person As earlier stated, in the written statement filed by respondent Ratan 179 lal, the description of defendant No. 2 was correctly given by respondent Ratanlal himself as "M/s. Ratanlal Damdoolal and Bros." and not "M/s. Damdoolal and Bros." Moreover, an order dated 19.8. 1955 was made by the trial court permit ting the correction to be made even though it was not duly incorporated in the plaint thereafter. It is significant that the first appeal and the second appeal filed against the compromise decree made by the respondent in which the firm as one of the appellants was correctly described as "M/s. Ratanlal Damdoolal and Bros." and not "M/s. Damdoolal and Bros". The decree was, therefore, against "M/s. RatanIal Damdoolal and Bros." and this is how it was admittedly understood throughout by the respondent himself who repre sented the firm at every stage of the earlier suit till the final decision by the High Court, describing the firm cor rectly as "M/s. Ratanlal Damdoolal and Bros." Obviously this ground is non existent. The next ground of nullity pleaded is that the decree does not direct discharge of defendant No. 3, Puranmal. Admittedly, no relief was claimed or granted against defend ant No. 3, Puranmal who was treated by all to be only a formal party. This ground also is, therefore, non existent. The next ground is that there is no consideration for aban donment of the interest of Puranmal which renders the corre sponding term void. Admittedly, the terms of compromise show payment of Rs.2,600 to Puranmal and execution of a sale deed by Puranmal in favour of defendant Nos. 1 and 2 who alone thereafter remained the interested parties. This is how Shri Salve, learned counsel for the respondent summarised the entire grounds of nullity pleaded in the plaint. On the admitted facts appearing from the record itself, learned counsel for the respondent, was unable to show that all or any of these averments in the plaint disclose a cause of action giving rise to a triable issue. In fact, Shri Salve was unable to dispute the inevitable consequence that the plaint was liable to be rejected under Order 7 Rule 11, C.P.C. on these averments. All that Shri Salve contended was that the Court did not in fact reject the plaint under Order 7 Rule 11, C.P.C. and summons having been issued, the trial must proceed. In our opinion, it makes no difference that the Trial Court failed to perform its duty and proceeded to issue summons without carefully reading the plaint and the High Court also overlooked this fatal defect. Since the plaint suffers from this fatal defect, the mere issuance of summons by the Trial Court does not require that the trial should proceed even when no triable issue is shown to arise. Permitting the continuance of such a suit is tantamount to licensing frivolous and vexatious litigation. This cannot be done. 180 It being beyond dispute that the plaint averments do no disclose a cause of action, the plaint is liable to be rejected under Order 7 Rule 11, C.P.C. without going into the applicability of Order 23 Rule 3A, C.P.C. to the present suit. Having reached this conclusion, it is unnecessary to adopt the technical course of directing the Trial Court to make the consequential order of rejecting the plaint and, instead, we adopt the practical course of making that order in this proceeding itself to avoid any needless delay in conclusion of this futile litigation. Consequently, the appeal is allowed. The impugned orders of the Trial Court and the High Court holding the suit to be maintainable are set aside and the plaint is rejected under Order 7 Rule 11, C.P.C. The respondent shall pay the appel lants ' costs throughout. R.S.S. Appeal allowed.

One Motilal who owned Goyal Talkies entered into a partnership with respondent Ratanlal representing the joint family firm of M/s. Ratanlal Damdoolal and Bros., for the purpose of running the cinema business. Later, the said Motilal together with his wife and children filed a civil suit for dissolution of partnership, rendition of accounts, etc., against respondent Ratanlal, as defendant No. 1, the firm "M/s Damdoolal and Bros." as defendant No. 2, and one Puranmal as defendant No. 3. Motilal subsequently filed an application for correction of the description of defendant No. 2 firm, which was allowed. The suit was compromised. According to one of the terms of the compromise, plaintiff was to pay to defendant Nos.1 and 2 a sum of Rs.15,700 in full satisfaction of their claim, subject to final accounting. The plaintiff paid this sum within the specified period and thereupon the receiver gave possession. Subsequently, the Court passed a final decree dated 16.11.1959 stating that the partnership stood dissolved, and directing defendant Nos. 1 and 2 to refund to the plaintiff the amount of Rs.5,470 which was the excess amount paid by the plaintiff to them. Defendant Nos. 1 and 2 filed an appeal against the final decree which was dis missed, and their second appeal in the High Court was also dismissed on 2.12.1972. Thereafter, Civil Suit No. 1699 of 1980 was filed by Ratanlal, respondent herein, against the appellants, who are the legal representatives of Motilal, assailing the consent decree after taking the entire benefit thereunder. The reliefs claimed were for a declaration that the final decree dated 16.11.1959 was a nullity, and for possession of Goyal Talkies, etc. The appellants resisted the suit inter alia on the ground that it was barred by res judicata, and further that the suit was also barred by virtue of Rule 3A Order 23, C.P.C. The Trial Court framed a 173 preliminary issue regarding maintainability and held the suit to be maintainable. The High Court dismissed the civil revision against that order. Before this Court it was contended on behalf of the appellant that the suit was barred by virtue of Rule 3A of Order 23 and even otherwise tile plaint averments did not disclose any cause of action in order to raise a triable issue. In reply, it was contended that Rule 3A of Order C.P.C., had no application since the decree assailed in the suit was a date much prior to insertion of Rule 3A by amend ment with effect from 1.2.1977; and that the question of examining the frame of the suit to determine its maintain ability on any other ground did not arise since the appel lant 's case was based on the bar under Order 23, Rule 3A, and no specific objection for rejection of the plaint under order 7 Rule 1 t C.P.C., was taken earlier. During the course of hearing of the appeal, the respond ent filed an application for amendment of the plaint. Allowing the appeal, this Court, HELD: (1) On the admitted facts appearing from the record itself, counsel for the respondent was unable to show that all or any of the averments in the plaint disclose a cause of action giving rise to a triable issue. [179F] Since the plaint suffers from this fatal defect, the mere issuance of summons by the Trial Court does not require that the trial should proceed even when no triable issue is shown to arise. Permitting the continuance of such a suit is tantamount to licensing frivolous and vexatious litigation. This can not be done. [179G H] (3) It being beyond dispute that the plaint averments do not disclose a cause of action, the plaint is liable to be rejected under Order 7 Rule i 1, C.P.C. without going into the applicability of Order 23 Rule 3A, C.P.C. to the present suit. [180A] There is no ground to allow the application for amend ment of the plaint which apart from being highly belated, is clearly an afterthought fur the obvious purpose of averting the inevitable consequence of rejection of the plaint on the ground that it does not disclose any cause of action or raise any triable issue. Moreover, the proposed amendments in the plaint are to raise two grounds which are concluded 174 by the earlier adjudication ending with dismissal of Ratan lal 's Second Appeal against the impugned decree. [177E F]

Civil Appeals Nos. 801 802 of 1978: From the judgment and order dated the 30th September, 1976 of the Gujarat High Court at Ahmedabad in F.A. No. 696 of 1) 1971 and 1282 of 1969. Soli J. Sorabjee, I.N. Shroff and H.S. Parihar for the Appellant. S.K. Dholakia and R.C. Bhatia for Respondent Nos. The Judgment of the Court was delivered by CHANDRACHUD, C.J. These appeals raise a question of some importance from the point of Insurance Companies which insure motor vehicles against third party risks and more so, from the point of view of the general public which, by reason of the increasing hazards of indisciplined and fast moving traffic, is driven in despair to lodge claims for injuries suffered in motor vehicle accidents. In case of air accidents, the injured and the dependents of the deceased receive, without contest, fairly large sums by way of compensation from the Air Corporations. We have still to awaken to the need to evolve a reasonably comparable method for compensating those who receive injuries or die in road or train accidents. The victims of road accidents or their dependents are driven to wage a long and unequal battle against the Insurance Companies, which deny their liability on every conceivable ground and indulge in an ingenious variety of factual disputations from 'who was driving the vehicle ' to 'whose negligence was the sine qua non of the accident '. The delay in the final disposal of motor accident compensation cases, as in all 864 other classes of litigation, takes the sting out of the laws of compensation because, an infant child who seeks compensation as a dependent of his deceased father has often to await the attainment of majority in order to see the colour of the money. Add to that the monstrous inflation and the consequent fall in the value of the rupee: Compensation demanded say, ten years ago, is less than quarter of its value when it is received today. We do hope that the Government will apply itself seriously and urgently to this problem and find a satisfactory method of ameliorating the woes of victims of road accidents. We have just talked of delay and it is just as well that we begin by saying that the accident out of which these proceedings arise happened on February 1, 1966. A collision took place between a motor car, No. GJY 4973, and a goods truck, No. GTA 4123, at about 8.30 P.M. On Naroda Road, Ahmedabad, as a result of which Ajit Sinh, who was driving the car died instantaneously and Jadavji Keshavji Modi, who was travelling in the car, sustained injuries. The truck was insured against third party risk with the appellant, the Motor owners Insurance Co. Ltd. The appellant had then an office in Ahemdabad but it ultimately merged with the New India Assurance Co. Ltd., Bombay. Respondents 1 (a) to I (g), who are the heirs and legal representatives of the deceased Ajit Sinh, filed an application before the Motor Accidents Claims Tribunal, Ahmedabad, under section 110 D of the , 4 of 1939, seeking compensation in the sum of Rs. 30,000 for his death. Jadavji Modi filed a separate application asking for compensation of Rs. 10,000 for the injuries suffered by him. The Tribunal dismissed both the applications by a common judgment dated June 2(, 1968 on the ground that respondent No. 3 could not be said to have been driving the truck rashly and negligently at the time of the accident. Jadavji Modi and respondents I (a) to I (g) filed separate appeals in the Gujarat High Court from the Judgment of t he Tribunal, being First Appeals Nos. 1202 of 1969 and 696 of 1971 respectively. These appeals were disposed of by the High Court by a common judgment dated September 30, 1976. The hearing proceeded, both before the Tribunal and the High Court, on the basis that the truck was used for carrying goods. The High Court allowed the appeals, awarding a compensation of Rs. 19,125 to 865 respondents 1 (a) to 1 (g) with 6% interest from the date of application until realisation of the amount and a compensation of Rs. 10,000 with similar interest to Jadvaji Modi. These appeals by special leave are directed against the judgment of the High Court. This Court by its order dated April 18, 1978 granted special leave to the appellant to appeal from the judgment of the High Court, limited to the question relating to the construction of section 95 (2) of the , ("the "). Chapter VIII of the bears the title "Insurance of motor vehicles against third party risks". Section 93 defines certain terms while section 94 (1) provides for the necessity to insure a vehicle against third party risks. By that section, no person can use a Motor vehicle in a public place, except as a passenger, unless there is in force in relation to the use of the vehicle a policy of insurance complying with the requirements of the chapter. Section 95 prescribes the requirements of the insurance policy and the "limits of liability" thereunder. Broadly, by sub section (1) of section 95, a policy of insurance must insure the person or classes of persons specified in the policy to the extent specified in sub section (2) against any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place. The proviso to sub section (I) consists of three clauses by which, speaking generally, a policy is not required to cover (i) liability in respect of the death of or injuries to an employee arising out of and in the course of his employment; (ii) liability in respect of the death of or bodily injury to persons carried in the vehicle except where the vehicle is used for carrying passengers for hire or reward; and (iii) any contractual liability. That takes us to the provisions contained in section 95 (2) of the , the interpretation of which is the sole question for our consideration in this appeal. The , save for Chapter VIII relating to the insurance of motor vehicles against third party risks, has been in force since July 1, 1939, in what were known as Part A and Part States and since April 1, 1951 in Part States. Chapter VIII came into force on July 1, 1946. Section 95 (2) of the originally read thus: "95 (2) Subject to the proviso to sub section (1), a 866 policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely : (a) where the vehicle is a vehicle used or adapted to be used for the carriage of goods, a limit of twenty thousand rupees; (b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a a contract of employment, in respect of persons other than passengers carried for hire or reward, a limit of twenty thousand rupees; and in respect of passengers a limit of twenty thousand rupees in all, and four thousand rupees in respect of an individual passenger, if the vehicle is registered to carry not more than six passengers excluding the driver or two thousand rupees in respect of an individual passenger, if the vehicle is registered to carry more than six passengers excluding the driver; (c) where the vehicle is a vehicle of any other class, the amount of the liability incurred." (emphasis supplied) Clause (a) of sub section (2) was substituted by a new clause by section 74 of the Motor Vehicles (Amendment) , 100 of 1956, with effect from February 16, 1957. The amended clause (a), which was in force on February 1, 1966 when the Incident leading to these proceedings occurred, reads thus: "95(2)(a) Where the vehicle is a goods vehicle, a limit of twenty thousand rupees in all, including the liabilities, if any, arising under the , in respect of the death of, or bodily injury to, employees (other than the driver), not 867 exceeding six in number, being carried in the vehicle." (emphasis supplied) Clauses (b) and (c) of section 95 (2) remained as they were in 1939 and were not touched by the 1956 Amendment. Section 95 (2) underwent a further amendment by the Motor Vehicles (Amendment) , 56 of 1969, which came into force on March 2, 1970. As a result of that amendment, the section reads thus: "95 (2) Subject to the proviso to sub section (l), a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely : D (a) where the vehicle is goods vehicle, a limit of fifty thousand rupees in all, including the liabilities, f any, arising under the , in respect of the death of, or bodily injury to employees (other than the driver), not exceeding six in number, being carried in the vehicle; (b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment (i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all; (ii) in respect of passengers: (1) a limit of fifty thousand rupees in all where the vehicle is registered to carry more than thirty Passengers; 868 (2) a limit of seventy five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers; (3) a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers; and (4) subject to the limits aforesaid ten thousand rupees for each individual passenger in any other case; (c) save as provided in clause (d), where the vehicle is a vehicle of any other class, the amount of liability incurred; (d) irrespective of the class of the vehicle, a limit of rupees two thousand in all in respect of damage to any property of a third party. " (emphasis supplied) We are concerned only with clause (a) of section 95 (2) and that too, as it existed on February 1, 1966 when the collision between the car and the truck took place. We have extracted the other clauses of section 95 (2) in order to trace the legislative history of the section and to see whether the language used by the legislature in other parts of the same section affords a comparative clue to the interpretation of the provision contained in clause (a). Clause (a) as originally enacted in 1939, provides that the insurance policy must cover the liability in respect of third party risks upto the limit of twenty thousand rupees, where the vehicle is used or adapted to be used for the carriage of goods. By the amendment introduced by the Amendment 100 of 1956, the words "in all" were added after the words "twenty thousand rupees". Clause (a) thus amended read to say that where the vehicle is a goods vehicle, the policy of insurance shall cover the liability in regard to third party risks upto the limit of twenty thousand rupees in all. Whereas clause (a) in its original form spoke of a vehicle "used or adapted to be used for the carriage of goods", under the 869 amendment of 1956, the clause was made applicable to cases where the vehicle "is a goods vehicle". The other amendment introduced by the of 1956 was that the overall limit of twenty thousand rupees was expressed to include the liability arising under the to the extent mentioned in the amendment. The amendment introduced by the Amendment 56 of 1969 enhanced the liability under clause (a) from twenty thousand rupees to fifty thousand rupees in all. Clause (b) of section 95 applies to vehicles in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment. Under that clause as it stood originally in 1939, the liability was restricted to twenty thousand rupees in respect of persons other than passengers carried for hire or reward; and to twenty thousand rupees in all in respect of passengers. The Amendment of 1956 did not make any change in clause (b). But, the Amendment of 1969 enhanced the liability to the limit of fifty thousand rupees in all in respect of persons other than passengers carried for hire or reward. In respect of passengers, the liability was enhanced from twenty thousand rupees to fifty thousand rupees in all, seventy five thousand rupees in all one lakh rupees in all, depending upon the registered capacity of the vehicle to carry passengers. It may be recalled that the High Court awarded compensation in the sum of Rs. 19,125 to respondents 1 (a) to 1 (g) who are the heirs and legal representatives of Ajit Sinh who was driving the car, and Rs. 10,000 to Jadavji Modi who was travelling in the car. The total amount of compensation awarded to the claimants thus comes to Rs. 29,125 that is to say, it is in excess of Rs. 20,000. The contention of Shri Sorabjee who appears on behalf of the appellant insurance company is, that under clause (a) as it stood at the material time, the liability of the insurer under the statutory policy taken by the owner of the goods vehicle is limited to twenty thousand rupees in all and, therefore, the insurer cannot be asked to pay compensation in excess of that amount. The liability to pay the balance, viz. Rs. 9,125 must according to the learned counsel, be fastened on the owner of the goods vehicle who would be vicariously responsible for the negligence of his employee who was driving the goods vehicle. In support of this submission counsel relies strongly on the circumstance that the Amendment of 1956 which came into force on February 16, 1957, introduced the words 870 "in all" in clause (a). It is urged that these words were introduced advisedly and deliberately in order to limit the overall liability of the insurer to twenty thousand rupees under the statutory policy. These words of limitation cannot be ignored by asking the appellant to pay compensation in excess of twenty thousand rupees. Counsel also seeks to derive support to his submission from the use of the words "in all" in clauses (b) and (d) of section 95 (2) as amended by Amendment 56 of 1969 which came into force on March ". Having given our anxious consideration to these contentions of Shri Sorabjee, which are not without plausibility, we have come to the conclusion that the construction canvassed by the learned counsel will lead to great injustice and absurdity and must, therefore, be eschewed since, especially, the words of section 95 (2) cannot, in the context in which they occur, be regarded as plain and unambiguous. We with first demonstrate the harsh and strange consequences which will flow out of the construction pressed upon us and we with then show why we consider That the material words of the section are of doubtful import. for example, two or three persons die in a collision between a car and a goods vehicle and two or three others are injured as a result of the negligence of the driver of the goods vehicle, the heirs of the deceased and the injured persons will together be entitled to twenty thousand rupees in all, no matter how serious the injuries and how grave the hardship to the heirs ensuing upon the loss of lives of those who perished in the collision. But there is a more flagrant injustice which one shall have to countenance if one were to accept the argument advanced on behalf of the appellant and it is this : If two persons of unequal economic status die in the kind of collision mentioned above, the heirs of the affluent victim will virtually monopolise the compensation by getting a lion 's share in it, thereby adding insult to the injury caused to the heirs of the indigent victim. The purpose of law is to alleviate, not augment, the sufferings of the people. It is well known that the award of compensation depends upon a variety of factors, including the extent of monetary deprivation to which the heirs of the deceased are subjected. Applying that criterion as one of the many variable criteria which are applied for fixing compensation in motor accident cases, the heirs of the affluent victim may have been awarded, say, a compensation of Rs. 90,000. The heirs of the other victim who may have been just managing to keep his body and soul together will probably have received by that standard a compensation of, say, 871 ten thousand rupees. The compensation awarded to these two groups of heirs shall have to be reduced rateably in the proportion of 9: 1 in order to ensure it does not exceed rupees twenty thousand "in all". The result of this will be that the insurance company will be liable to pay a sum of Rs. 18,000 to the heirs of the affluent person and Rs. 2,000 to the heirs of the other person. The icy band of death may have fallen in one stroke on two victims of disparate economic status but then, the arithmetic of the appellants argument will perpetuate the gross inequality between the two even after their death. We must avoid a construction which will produce such an unfair result, if we can do so without doing violence to the language of the section. The owner of the truck will undoubtedly be liable to pay the balance but common experience shows that the woes of the injured and of the heirs of those who perish in automobile accidents begin after they embark upon the adventure of execution proceedings. There are proverbial difficulties in proving ownership of goods vehicles, particularly if they are subject to a hire purchase agreement and truck owners are quite known for the ease with which they proclaim their insolvency. It is therefore no consolation that the left over liability will fall on the insured. Both by common practice and the application of recognised rules of statutory construction, harsh consequences following upon an interpretation are not considered as the governing factor in the construction of a statute, unless its language is equivocal or ambiguous. If the language is plain and capable of one interpretation only, we will not be justified in reading into the words of the a meaning which does not follow natural from the language used by legislature. It therefore becomes necessary to consider whether the language used by the legislature in section 95 (2) of the admits of any doubt or difficulty or is capable of one interpretation only. If the words used by the legislature in clause (a) of section 95 (2) were the sole factor for determining the outside limit of the insurer 's liability, it may have been possible to accept the submission that the total liability of the insurer arising out of the incident or occurrence in question cannot exceed Rs. 20,000. Clause (a) qualifies the extent of the insurer 's liability by the use of the unambiguous expression "in all" and since that expression was specially introduced by an amendment, it must be allowed its full play. The legislature must be presumed to have intended what it has plainly said. But, clause (a) does not stand alone and is not 872 the only provision to be considered for determining the outside limit of the insurer 's liability. In fact, clause (a) does not even form a complete sentence and makes no meaning by itself. Like the other clauses (b) to (d), clause (a) is governed by the opening words of section 95 (2) to the effect that "a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits", that is to say, the limits laid down in clauses (a) to (d). We have supplied emphasis in order to focus attention on the true question which emerges for consideration: What is the meaning of the expression 'any one accident"? If that expression were plain and unambiguous, and its meaning clear and definite, effect would be required to be given to it regardless of what we think of its wisdom or policy. But as we will presently show, the expression "any one accident ' does not disclose one meaning conclusively according to the laws of language. It, clearly, is capable of more than one meaning, introducing thereby an ambiguity which has to be resolved by resorting to the well settled principles of statutory construction. The expression "any one accident" is susceptible of two equally reasonable meanings or interpretations. If a collision occurs between a car and a truck resulting in injuries to five persons, it is as much plausible to say that five persons were injured in one accident as it is to say that each of the five persons met with an accident. A by stander looking at the occurrence objectively will be right in saying that the truck and the car met with an accident or that they were concerned in one accident. On the other hand, a person looking at the occurrence subjectively, like the one who is injured in the collision, will say that he met with an accident. And so will each of the five persons who were injured. From their point of view, which is the relevant point of view, "any one accident" means "accident to any one '. In matters involving third party risks, it is subjective considerations which must prevail and the occurrence has to be looked at from the point of view of those who are immediately affected by it. If the matter is looked at from an objective point of view, the insurer 's liability will be limited to Rs. 20,000 in respect of injuries caused to all the five persons considered en bloc as a single entity, since they were injured as a result of one single collision. On the other hand, if the matter is looked at subjectively as it ought to be, the insurer 's liability will extend to a sum of Rs. 20,000 in respect of the injuries suffered by each one of the five persons, since each met with an accident, though during 873 the course of the same transaction. A consideration of preponderating importance in a matter of this nature is not whether there was any one transaction which resulted in injuries to many but whether more than one person was injured, giving rise to more than one claim or cause of action, even if the injuries were caused in the course of one single transaction. If more than one person is injured during the course of the same transaction, each one of the persons has met with an accident. We are, therefore, of the opinion that the ambiguity in the language used by the legislature in the opening part of section 95 (2) and the doubt arising out of the co relation of that language with the words "in all" which occur in clause (a), must be resolved by having regard to the underlying legislative purpose of the provisions contained in chapter VIII of the which deals with third party risks. That is a sensitive process which has to accommodate the claims of the society as reflected in that purpose. Indeed, it is in this area of legislative ambiguities, unfortunately not receding, that courts have to fill gaps, clear doubts and mitigate hardships. In the words of Judge Learned Hand: "It is one of surest indexes of a mature and developed jurisprudence. to remember that statutes always have some purpose or object to accomplish whose sympathetic and imaginative discovery is the surest guide to their meaning". (1) There is no table of logarithms to guide or govern statutory construction in this area, which leaves a sufficient and desirable discretion for the Judges to interpret laws in the light of their purpose, where the language used by the law makers does not yield to one and one meaning only. Considering the matter that way, we are of the opinion that it is appropriate to hold that the word "accident" is used in the expression "any one accident" from the point of view of the various claimants, each of whom is entitled to make a separate claim for the accident suffered by him and not from the point of view of the insurer. In The South Staffordshire Tramways Company Ltd. vs The Sickness and Accident Assurance Association Ltd., (2) the plaintiffs, a 874 tramcar company, effected with the defendants an insurance against claims for personal injury in respect of accidents caused by vehicles upto the amount of 250 "in respect of any one accident ' '. One of the vehicles specified in the insurance policy was overturned, causing injuries to about forty persons, as a result of which the plaintiffs became liable to pay to those persons compensation to the extent of 833. The question before the Court was whether the injuries caused to each of the said forty persons constituted a separate accident within the meaning of the policy. The Court of Appeal answered that question in the affirmative. Lord Esher, M.R., observed in his judgment that the claims made by the plaintiffs were in respect of personal injuries, and each person injured claimed ( ' for injuries in respect of an accident to his person by the vehicle. "If several persons were injured", said the Master of Rolls, "upon the true construction of the policy, there were several accidents". Bowen, L.J. took the same view of the matter by saying that the word "accident" may be used in either of two ways: An accident may be spoken of as occurring to a person. Or as occurring to a train, or vehicle, or bridge. In the latter case, though several persons were injured who were in the train, or vehicle, or on the bridge, it would be an accident to the train, or vehicle, or bridge. In the former, "there might, however, be said to be several accidents, to the several persons injured". Fry, L.J., concurred in the view taken by his Brethren, and observed that the meaning of the word "accident", as used in the policy of insurance, is "any single injury to the person or property accidentally caused. " In Forney vs Dominion Insurance Co. Ltd. (1) the plaintiff, a solicitor, was insured under a professional indemnity policy whereby the defendants, the insurers, agreed to indemnify him in respect of loss arising from any claim or claims which may be made upon him by reason of any neglect, omission or error committed in the conduct of his business, subject to a proviso that the liability of the insurers was not to exceed a sum of 3000, "in respect of any one claim or number of claims arising out of the same occurrence ' '. The Solicitor 's assistant gave a certain advice in a motor accident case which betrayed negligence. The assistant had wrongly allowed a person to become administratrix of her late husband 's estate and the assistant also failed to issue writs within the six month limitation period. A claim was made against the Solicitor for his assistant 's negligence for depriving the claimants of their right to be paid 875 damages. The court assessed the quantum of damages differently for different claimants, which together exceeded the sum of 3000. It was held that the Solicitor 's assistant was negligent twice and therefore there were two occurrences in the same case in respect of which the Solicitor became liable to pay damages for negligence. Accordingly, the insurance company was held liable to indemify the Solicitor in respect of the damages awarded against him upto a limit of 3000 for each act of negligence. In Halsbury 's Laws of England, (1) the decision in South Staffordshire Tramways company is cited in support of the proposition that the word 'accident "may fall to be construed from the point of view of each individual victim, so as to produce, in effect, as many accidents (even in a single occurrence) as there are victims" . The provisions contained in section 95 (2) of the arose for consideration before a Full Bench of the High Court of Punjab in Northern India Transporters Insurance Co. Ltd. vs Smt. Amrawati, (2) a Full Bench of the High Court of Madras in Jayalakshami & Ors. vs The Ruby General Insurance Company, Madras & anr., (3) the High Court of Karnataka in Sanjiva Shetty vs Anantha & Ors., (4) and the High Court of Orissa in Sabita Pati & Ors. vs Rameshwar Singh and anr. (5) and M/s Construction India & Ors. vs Mahindra Pal Singh Ahluwalia & ors. (6) The Punjab case arose under section 95 (2) (b), while the other cases arose under section 95 (2) (a) of the . In the case before the Madras Full Bench, a person called Krishnaswami who was driving a car died as a result of a collision between his car and a goods vehicle. The Claims Tribunal dismissed the claim of the heirs of the deceased, but a Division Bench of the High Court took the view that compensation in the sum of Rs. 40,000 would be payable to them. The Division Bench referred for consideration of the Full Bench the question whether on a true construction 876 of clause (a) of section 95 (2), the liability of the Insurance company was limited to rupees twenty thousand. The Full Bench, overruling a previous decision of a Division Bench, answered this question in the affirmative. It is important to bear in mind that the case before the Madras High Court was in a material respect different from the case before us. The High Court had to consider the claim of one person only since, only one person had met with an accident. In the case before us, more than one person has been injured, which raises the question as regards the construction of the words "any one accident ' ' which occur in section 95 (2). That question did not arise in the Madras case and the decision, therefore, does not touch the question before us. Similarly, in the case before the Orissa High Court in Sabita Pati, only one person was involved in the collision between a jeep and a goods vehicle. Relying on the judgment of the Full Bench of the Madras High Court, the Orissa High Court held that the liability of the Insurance company was limited to rupees twenty thousand under section 95(2)(a) of the . The n involvement of more than one person in a single occurrence raises a different question for consideration under section 95 (2) (a) than the involvement of a single person in a single occurrence. In the latter case, it may be true to say that the liability of the insurer is limited to rupees twenty thousand under a statutory policy. In the former, the interpretation of the words "any one accident ' ' came into play and we have already expressed our view on the meaning of those words. In the case before the Karnataka High Court in Sanjiva Shetty, a taxi and a car met with a collision, as a result of which two persons travelling in the taxi, the driver of the car and a boy called Bharatisha sitting on the roadside were injured. Before the High Court was the claim of the driver of the car and the boy. A Division Bench of the High Court held that the total liability of the Insurance Company was limited to rupees twenty thousand in respect of the injuries suffered by them. The High Court apportioned the liability by directing the insurance company to pay Rs. 18,730 to the boy and Rs. 1 ,270 to the driver of the car. In view of our judgment in the instant case, the decision of the Karnataka High Court cannot be considered to be good law. We may add that paragraph 22 of the judgment of the High Court says that it was "common ground" between the parties that the limit of the liability of the insurers was only rupees twenty thousand in all. The High Court added ". indeed, no argument was addressed to the contrary by any of the 877 parties". In the case before the Orissa High Court in M/s Construction India, two children travelling in a school bus belonging to the Orissa Government died in a collision between the bus and a goods vehicle. Section 95 (2) (a) was held attracted and since more than one person was injured as a result of a single occurrence, the same question arose as before us. The orissa High Court held that since the total compensation exceeded rupees twenty thousand, the liability of the insurers was limited to rupees twenty thousand in all and that the amount payable to the heirs of the deceased children was liable to be apportioned. This decision also cannot be considered as laying down the correct law and there too, as in Sanjiva Shetty, no argument was advanced before the High Court on the construction of clause (a), particularly in reference to the words "any one accident" which occur in section 95 (2). The case before the Punjab Full Bench in Northern India Transporters, arose under the old section 95 (2) (b) and need not really detain us. Under that section, as it stood prior to its amendment in 1969, a policy of insurance was required to cover any liability incurred in respect of any one accident upto the limit of twenty thousand rupees in respect of persons other than passengers carried for hire or reward, where the vehicle was one in which passengers were carried for hire or for reward or by reason of or in pursuance of a contract of employment. In respect of passengers, there was a twofold limit on the insurer 's liability: "a limit of twenty thousand rupees in all" and four thousand rupees in respect of an individual passenger if the vehicle was registered to carry not more than six passengers excluding the driver, or two thousand rupees in respect of an individual passenger if the vehicle was registered to carry more than six passengers excluding the driver. A passenger bus was involved in an occurrence in which two passengers were killed. The High Court held that the straightforward course was to take the language of the as it stood, which left no doubt that in the case of a bus registered for carrying more than six passengers, the limit of the liability was twenty thousand rupees in all and there was a further limit in respect of each individual passenger in the sum of two thousand rupees. The words "any one accident ' in the opening part of section 95 (2) made no difference to this interpretation because, if more than one passenger was injured in a single occurrence, no one passenger was entitled to receive more than rupees two thousand or four thousand, depending on the registered capacity of the vehicle to carry passengers. 878 The judgment of the Punjab High Court was brought in appeal to this Court in Sheikhupura Transport Co. Ltd. vs Northern India Transport Co.(1) For reasons aforesaid, the judgment in that case is not an authority on the interpretation of clause (a) of section 95 (2). After setting out the relevant provisions of section 95 (2) at pages 24 and 25 of the Report, Hegde J. speaking for himself and Jaganmohan Reddy, J. concluded: "In the present case we are dealing with a vehicle in which more than six passengers were allowed to be carried. Hence the maximum liability imposed under section 95 (2) on the insurer is Rs. 2,000 per passenger though the total liability may go upto Rs. 20,000. ' ' Towards the end of the judgment, it was observed that reading the provision contained in sections 95 and 96 together, ". it is clear that the statutory liability of the insurer to indemnify the insured is as prescribed in Sec. 95,(2). Hence the High Court was right in its conclusion that the liability of the insurer in the present case only extends upto Rs. 2,000 each, in the case of Bachan Singh and Narinder Nath". In vies of the limit on the insurer 's liability in respect of each passenger, the argument on the construction of the words "any one accident" had no relevance and was therefore neither made nor considered by the Court. Different considerations may arise under clause (b), as amended by 56 of 1969, but we do not propose to make any observations on that aspect of the matter, since it does not directly arise before us. It was suggested that the interpretation which we are putting on section 95 (2) (a) will create difficulties in cases where the insured also incurs liability under the in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle. It is true that under section 95 (2) (a), the liability of the insured and therefore the insurer 's indemnity includes the liability of the aforesaid description under the of 1923. But that is a matter of apportionment which may require a rateable deduction to be made from the compensation payable to each victim, depending upon the quantum of compensation payable under the of 1923 to employees carried in the goods vehicle. 879 We cannot part with this case without impressing upto the A Government, once again, the urgent need to provide by law for the payment of reasonable amounts of compensation, without contest, to victims of road accidents. We find that road accidents involving passengers travelling by rail or public buses are usually followed by an official announcement of payment of ex gratia sums to victims, varying between five hundred and two thousand rupees or so. That is a niggardly recognition of the State 's obligation to its people particularly so when the frequency of accidents involving the public transport system has increased beyond believable limits. The newspaper reports of August and September 1981 regarding deaths and injuries caused in such accidents have a sorry story to tell. But we need not reproduce figures depending upon newspaper assessment because, the newspapers of September 18, 1981 carry the report of a statement made by the Union Minister of State for Shipping and Transport before the North Zone goods transport operators . that 20,000 persons were killed and 1.5 lakh were injured in highway accidents during 1980. We wonder whether adequate compensation was paid to this large mass of suffering humanity. In any event, the need to provide by law for the payment of adequate compensation without contest to such victims can no longer be denied or disputed. It was four years ago that this Court sounded a warning and a reminder (1): "With the emergence of an ultra modern age which has led to strides of progress in all spheres of life, we have switched from fast to faster vehicular traffic which has come as a boon to many, though some times in the case of some it has also proved to be a misfortune The time is ripe for serious consideration of creating no fault liability. Having regard to the directive principles of State policy, the poverty of the ordinary run of victims of automobile accidents, the compulsory nature of insurance of motor vehicles, the nationalisation of general insurance companies and the expanding trends towards nationalisation of bus transport, the law of torts based on no fault needs reform. ". it is only just and fair that the Legislature should make a suitable provision so as to pay adequate compensation by properly evaluating the precious life of a 880 citizen in its true perspective rather than devaluing human lives on the basis of an artificial mathematical formula. It is common knowledge that where a passenger travelling by a plane dies in an accident, he gets a compensation of Rs. 1,00,000 or like large sums, and yet when death comes to him not through a plane but through a motor vehicle he is entitled only to Rs. 2,000. Does it indicate that the life of a passenger travelling by plane becomes more precious merely because he has chosen a particular conveyance and the value of his life is considerably reduced if he happens to choose a conveyance of a lesser value like a motor vehicle. Such an invidious distinction is absolutely shocking to any judicial or social conscience and yet section 95 (2) (d) of the seems to suggest such a distinction. We hope and trust that our law makers will give serious attention to this aspect of the matter and remove this serious lacuna in section 95 (2) (d) of the . We would also like to suggest that instead of limiting the liability of the Insurance Companies to a specified sum of money as representing the value of human life, the amount should be left to be determined by a Court in the special circumstances of each case. We further hope our suggestions will be duly implemented and the observations of the highest Court of the country do not become a mere pious wish. ' (per Fazal Ali J, pp. 945, 946, 950, 951). These observations are still languishing in the cold storage of pious wishes. With the emergence of the General Insurance Corporation which has taken over general insurance business of all kinds, including motor vehicles insurance, it should be easy to give statutory recognition to the State 's obligation to compensate victims of road accidents promptly, adequately and without contest. We are happy to note that the Gujarat High Court, by its judgment under appeal, took a just, correct and realistic view of the matter by holding that, under the statutory policy, the appellant insurance company is liable to pay the full amount of compensation to the heirs of the driver of the car and to the passenger who was travelling in the car, each amount being less than Rs. 20,000. 881 In the result the appeals are dismissed with costs in separate sets in favour of respondents 1 (a) to 1 (g) who are the heirs of the deceased Ajit Sinha and in favour of respondents 3 to 6 who are the heirs of Jadavji Keshavji Modi since deceased. N.V.K. Appeals dismissed.

Section 95 of the prescribes the requirements of an insurance policy and the limits OF liability thereunder. By sub section (1) of section 95, a policy of insurance must insure the person or classes of persons specified in the policy to the extent specified in sub section (2) against any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place. Section 95(2) of the Act as it originally stood read thus: "95(2): Subject to the proviso to sub section (I) a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely: (a) where the vehicle is a vehicle used or adapted to be used for the carriage of goods, a limit of twenty thousand rupees. ". This provision was substituted by a new clause by section 74 of the Motor Vehicles (Amendment) Act, 1956 with effect from February 16, 1957. The amended clause read: "95(2) (a) : Where the vehicle is a goods vehicle, a limit of twenty thousand rupees in all, including the liabilities, if any, arising under the Work men 's Compensation Act, 1923, in respect of the death of, or bodily injury to, employees (other Than The driver), not exceeding six in number, being carried in the vehicle". This provision underwent further amendment by the Motor Vehicles (Amendment) Act, 1969 which came into force on March 7, 1970. A collision took place between a motor car and a goods truck in February 1966 as a result of which the driver of The car died instantaneously and the person travelling in the car sustained injuries. The Truck was insured against third party risk with the appellant insurance company. 861 The heirs and legal representatives of the deceased field an application before the Motor Accidents Claims Tribunal, under section 110 D of the Act, claiming compensation in the sum of Rs. 30,000 for the death caused in the accident. The person who was injured filed a separate application asking for compensation of Rs. 10,000 for the injuries suffered by him. The Tribunal dismissed both the applications on the ground that respondent No. 3 could not be said to have been driving the truck rashly and negligently at the time of the accident. The claimants filed separate appeals in the High Court, which awarded a compensation of Rs. 19,125 to the heirs of the deceased and Rs. 10,000 to the injured person. In the appeals to this Court it was contended on behalf of the appellant insurance company: (i) that under clause (a) of section 95(2) as it stood at the material time, the liability of the insurer under the statutory policy taken by the owner of the goods vehicle is limited to Rs. 20,000 in all and, therefore, the insurer cannot be asked to pay compensation in excess of that amount, and that the liability to pay the balance must be fixed on the owner of the goods vehicle who would be vicariously responsible for the negligence of his employee who was driving the goods vehicle, and (ii) that the Amendment Act of 1956 which came into force on February 16, 1957 introduced the words 'in all ' in clause (a) and that these words were introduced to limit the overall liability of the insurer to twenty thousand rupees Dismissing the appeals, ^ HELD: 1. The High Court took a just, correct and realistic view of the matter by holding that, under the statutory policy the appellant insurance company is liable to pay the full amount of compensation to the heirs of the deceased and to the passenger travelling in the car, each amount being less than Rs. 20,000. [880 G H] The purpose of law is to alleviate, not augment, the sufferings of the people. The award of compensation depends upon a variety of factors, including the extent of monetary deprivation to which the heirs of the deceased are subjected. [870 G] 3. By common practice and the application of recognised rules of statutory construction, harsh consequences following upon an interpretation are not considered as the governing factor in the construction of a statute, unless its language is equivocal and ambiguous. [871 E] 4. Clause (a) of section 95 (2) qualifies the extent of the insurer 's liability by the use of the unambiguous expression 'in all ' and since that expression was specially introduced by an amendment, it must be allowed its full play. The legislature must be presumed to have intended what it has plainly said. But, clause (a) does not stand alone and is not the only provision to be considered for determining the outside limit of the insurer 's liability. In fact, clause (a) does not even form a complete sentence and makes no meaning by itself. Like the other clauses (b) to (d), clause (a) is governed by the opening words of 862 section 95 (2) to the effect that "a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits", that is the limits laid down in clauses (a) to (d). [871 H 872 B] 5 (i) The expression, 'any one accident ' is susceptible of two equally reasonable meanings or interpretations. If a collision occurs between a car and a truck resulting in injuries to five persons, it is as much plausible to say that five persons were injured in one accident as it is to say that each of the five per sons met with an accident. A bystander looking at the occurrence objectively will be right in saying that the truck and the car met with an accident or that they were concerned in one accident. On the other hand, a person looking at the occurrence subjectively, like the one who was injured in the collision, will say that he met with an accident. And so will each of the five persons who were injured. From their point of view, which is the relevant point of view, "any one accident" means "accident to any one '. In matters involving third party risks, it is subjective considerations which must prevail and the occurrence has to be looked at from the point of view of those who are immediately affected by it. [872 E F] 5 (ii) A consideration of preponderating importance in a matter of this nature is not whether there was any one transaction which resulted in injuries to many but whether more than one person was injured, giving rise to more than one claim or cause of action, even if the injuries were caused in the course of one single transaction. If more than one person is injured during the course of the same transaction, each one of the persons meets with an accident. [873A B] 6. The ambiguity in the language used by the legislature in the opening part of section 95 (2) and the doubt arising out of the co relation of that language with the words 'in all ' which occur in clause (a) must be resolved by having regard to the underlying legislative purpose of the provisions, contained in Chapter VIII of the Act which deals with third party risks. That is a sensitive process which has to accommodate the claims of the society as reflected in that purpose. [873 C] 7. In the area of legislative ambiguities courts have to fill gaps, clear doubts and mitigate hardships. There is no table of logarithms to guide or govern statutory construction in this area, which leaves a sufficient and desirable discretion for the Judges to interpret laws in the light of their purpose, where the language used by the law makers does not yield to one and one meaning only. lt is, therefore, appropriate to hold that the word "accident" is used in the expression any one accident" from the point of view of the various claimants, each of whom is entitled to make a separate claim for the accident suffered by him and not from the point of view of the insurer. [873 D, F G] 8. With the emergence of the General Insurance Corporation which has taken over general insurance business of all kinds, including motor vehicle insurance, it should be easy to give statutory recognition to the State 's obligation to compensate victims of road accidents, promptly, adequately and without con test . Cabell vs Markham, 737, 739 [1945]; The South Staffordshire Tramways Company Ltd. vs The Sickness and Accident Assurance Association Ltd., [1891]1 Q.B.D. 402; Forney vs Dominion Insurance Co. Ltd., [1969] 1 Weekly Law Reports, 928; Manjusri Raha and Ors. vs B.L. Gupta and Ors. ; , referred to. Northern India Transporters Insurance Co. Ltd. vs Smt. Amrawati, AIR 1966 Punjab 288, Jayalakshmi and Ors. vs The Ruby General Insurance Company, Madras and Anr. ; Sabita Pati and Ors. vs Rameshwar Singh and Anr. ; Sheikhupura Transport Co. Ltd. vs Northern India Transport Co., distinguished. Sanjiva Shetty vs Anantha and Ors. , M/s. Construction India and Ors. vs Mahindra Pal Singh Ahluwalia and Ors , disapproved.

Appeal No. 529 of 1958. Appeal from the judgment and decree dated March 6,1956, of the Allahabad High Court in Civil Misc. Writ No. 464 of 1954. C. B. Agwarwala, K. B. Asthana and C. P. Lal, for the appellants. M. C. Setalvad, Attorney General of India, A. V. Viswanatha Sastri and section P. Varma, for the respondent. August 22. The Judgment of the Court was delivered by SHAH, J. Under a treaty between the East India Company and Nawab Asafuddaula, the Province of Banaras was ceded about the year 1775 to the East India Company. The Company then granted a sanad to Raja Chet Singh, the former ruler of Banaras, and under that sanad, the rights and powers previously held by Raja Chet Singh were conferred afresh. Raja Chet Singh granted in jagir, pargana "Syudpore Bhettree" in perpetuity to his Diwan Ousan Singh as remuneration for services rendered to his family. Raja Chet Singh having renounced his gadi, the East India Company confirmed the grant made by the Raja in favour of Ousan Singh. Raja Chet Singh was succeeded by Raja Mahip Narain Singh who executed a sanad in favour of Ousan Singh affirming the grant. Land revenue settlements were made in the Province of Banaras about the year 1789 90, but the jagirs including "Syudpore Bhettree" were excluded from that settlement. Ousan Singh died in or 216 about the year 1800, and his son Sheo Narain Singh succeeded to the jagir. In the enquiry held by the Collector of Ghazipore into the proprietary right claimed by the jagirdar under Regulation 11 of 1819, it was declared that the grant to Ousan Singh was for life only and did not confer a heritable or transferable tenure in the parganas. The decision of the Collector was confirmed by the Commissioner of Bihar and Banaras, subject to the recommendation that Sheo Narain Singh should be maintained in possession of the parganas for life. The Government then directed in 1828 that a detailed settlement be made with the village zamindars, and offered Sheo Narain Singh allowance for life of one half of the revenue to be assessed on the pargana. Sheo Narain Singh declined to accept the offer and commenced an action in the civil court contesting the validity of the order resuming the jagir. The Government considered the question afresh, and resolved to revise the order of resumption and in July 1830, ordered that Sheo Narain Singh be considered Tahsildar of parganas "Syudpore Bhettree," and that the office be treated as hereditary devolving upon the descendants of the jagirdar and held so long as the incum bent did not infringe the privileges found to belong to other classes at the time of formation of the settlement. Sheo Narain Singh died before the resolution of the Government was communicated to him and he was succeeded by his son Harnarain Singh who withdrew the suit and signed a compromise incorporating the terms of the resolution. On August 19, 1831, the Secretary to the Government addressed to the Agent of the Governor General at Banaras a letter requesting the Secretary to the Governor General in the Pension department to prepare the necessary documents relating to the grant of a sanad specifying, that parganas "Syudpore Bhettree" were granted on an "istmrar" tenure to Harnarain Singh for his own benefit and of his heirs and successors in perpetuity_on condition of their 217 paying to Government 3/4ths of the Jamma which the revenue officers may in a resettlement of the parganas assess thereon, and that all claims to proprietary right to any village or villages situate in the Raid parganas shall be fully enquired into and in the event of any such claims being established to the satisfaction of the Government, the village or villages forming the subject of the claim shall be considered distinct from and independent of the grant and that a settlement shall be made with the proprietors as in other cases, that the office of Tahsildar shall belong to Harnarain Singh and be hereditary in his family so long as the conditions prescribed for the duties of that office be not infringed, and that in virtue of such office, the separate proprietors shall continue to pay the Jamma which may be assessed on their villages through Harnarain Singh or such other member of the family as the Government may appoint, provided that 1/4th of the Jamma of such separated villages shall be deducted from the payment to be made to the Government in lieu of all remuneration for discharging the duties of Tahsildar, and provided further that until the settlement shall be completed, Harnarain Singh shall continue to pay Jamma to Government. This proposal calling upon Harnarain Singh to bear all the expenses of the administration and any loss in collection which may occur, departed from the terms of the compromise. Harnarain Singh refused to accept the offer of a sanad on the terms set out in that letter and also the office of Tahsildar. In the meanwhile, proceedings for settlement were commenced and on November 16, 1832, the Settlement Officer reported on the conclusion of a summary settlement of the parganas that in 166 mahals, the village zamindars established proprietary rights and the revenue. assessed upon them was Rs. 1,28.1960. He further reported that 12 mahals of which the gross revenue was Rs. 22,840 were settled with the jagirdar at a reduced revenue of Rs. 17,130. Harnarain Singh having refused to undertake 218 the office of Tahsildar on the terms offered by the Government, the Board of Revenue suggested that Harnarain Singh should receive 1/4th of the net collections after deducting from the gross collection the cost of Tahsil establishment thereby giving him an income of Rs. 36,322 8 0. The Board of Revenue recommended that a sanad be issued under the authority of the Lt. Governor conferring "the pension of Rs. 36,322 8 0 on Babu Harnarain Singh and his heirs in perpetuity". In a letter dated September 13, 1837, it was recorded that the Lt. Governor of N.W.F. Province was of the view that it would be more conformable with the terms of the agreement if the allowance on Harnarain Singh 's villages (12 mahals) were given in the form of a remission of revenue to the amount of one fourth, the Jamma being fixed at Rs. 17,130 instead of Rs. 22,940 and in the villages settled with zamindars (166 mahals) Harnarain Singh be paid annually a pension of 1/4th of the collections after deducting the Tahsildari charge, and on that footing Rs. 30,612 8 0 be granted to Harnarain Singh. By letter dated October 19, 1837, from the Secretary to the Lt. Governor, N.W.F. Province, the Secretary to the Board of Revenue was informed that the Lt. Governor had resolved to adopt the Board 's recommendation made in their letter dated September 26, 1837, and to allow Harnarain Singh 1/4th of the not collections after deducting the, expenses of the Tahsildari establishment i. e., Rs. 30, 612 8 0 out of a net Jamma of the villages amounting to Rs. 1,28,960. About the 12 mahals settled with Hamarain Singh, the allowance was directed to be made in the form of a remission of 1/4th of revenue assessed. Finally, by letter dated September 14, 1838, from the Secretary to the Sadar Board of Revenue to the Officiating Commissioner 5th Division, Banaras, it was stated that " 'what the Government intended to give is a clear fourth of the net revenue of the Pargana to the Muqurrureedar as pension". The letter further stated. 219 "2. The arrangement of paying a portion of that pension by a remission of revenue on certain mauzas settled, as was supposed, directly with the muqurrureedar was proposed by the Board and allowed by Government as a mere matter of convenience to the parties. Neither Government nor Board intended to alienate any part of the 'muqurrureedar 's pen sion to his son or to any other person. If the mauzas supposed to have been settled with the muqurrureedar for his own use and behalf, turn out to be held by another person on a distinct interest, it will be necessary, the Board observe to modify the arrangement previously allowed and to collect the, whole assessed revenue of those mauzas as of all others ; and when the same shall have been collected to pay the Muqurrureedar his clear fourth of the net collections. As however, these mauzas were settled by the Government with the Muqurrureedar his responsibility for the Jumma any portion of revenue which may fall in arrear by person or the arrangement made by him, or of the domes tic differences of his family, must be made good from his pension, before the assignment of the fourth share of the net collections can have effect. The Board must consider the Muqurrureedar as the owner of these villages during his life. With his family arrangements they have no concern. But if it will be his wish that the whole revenue be collected from these villages, and one fourth be returned to him from the treasury instead of receiving tha t fourth in the shape of a remission, he is at liberty to make the election. He is also the Board remark of course at liberty to cause those mauzas to be 220 transferred or sold in the case of arrear, but his responsibility for the assessed Jumma as fixed by the act of settlement will remain the same. It is manifest that the recommendations made by the Board of Revenue and the Secretary to the Government in the lengthy correspondence varied from time to time, but in the final letter it appears to have been made clear that an amount equivalent to 1/4th of the net revenue of the 166 mahals be given as pension annually to the jagirdar. A formal sanad, though contemplated, was, it appears, never issued, but it is common ground that the allowance was paid through the Treasury Office of the Collector of Ghazipor year after year since the year 1838 to Harnarain Singh and his descendants. This allowance to the jagirdar of "Syudpore Bhettree" was called sometimes in the revenue papers "malikana" sometimes pension" and sometimes a "share in the revenue of the entire pargana '. In 1951, the U. P. Legislature enacted the Uttar Pradesh Zamindari Abolition and Land Reforms Act 1 of 1951, and relying upon section 6(b) of the Act, the revenue authorities stopped payment of the allowance to the descendants of Harnarain Singh. The respondent who is a descendant of Harnarain Singh then presented Writ Petition No. 464 of 1954 in the High Court of Judicature at Allahabad for a writ in the nature of mandamus calling upon the State of Uttar Pradesh to forbear from interfering with his right to regular payment of the "pension, allowance or malikana" payable in. lieu of the hereditary estate of Harnarain Singh in respect of parganas "Syudpore Bhettree" and for an order for payment of the "pension, allowance or malikana" as it fell due. The respondent claimed inter alia that by virtue of the notification issued under section 4 of the Act, his right to receive the pension did not cease, especially when the scheme of the Act and the principle of assessment did not contemplate payment 221 of compensation in respect of extinction of his right to the allowance, and that in any event, there was no nexus between the pension and the estates sought to be acquired under Act 1 of 1951 or the zamindari: system so tight to be abolished, because the pension was neither land nor Immovable property nor an estate within the meaning of the Act and being merely compensation payable to him in lieu of the rights of his ancestors over the estates comprised within the pargana "Syndpore Bhettree", it was not liable to vest in the State. The High Court rejected certain preliminary objections to the maintainability of the petition (which objections are riot canvassed in this appeal) and held that the right of .the respondent to receive Rs. 36,330 per annum was not an "estate" within the meaning of the Act and that the right was not acquired under the Act nor did compensation fall to be paid for the same. In the view of the High Court, under section 6 of the Act, only the rights of the intermediaries in respect of land revenue of the lands comprised in the estate were extinguished and that the rights of third parties under a contract with the State not relating to the rights and privileges of intermediaries, tenants or other persons having interest in land were not effected, and the predecessors in interest of the respondent having been granted an allowance. annually in lieu of abandonment of the right to realise land revenue, the arrangement did not come to an .end because of the "abolition of the zamindari" under the Act. The question which falls to be determined in ,this appeal by the State of Uttar Pradesh, is whether the right of the respondent to receive the allowance under the arrangement of the year 1838 was extinguished as a consequence ensuing from the vesting of the "Sudpore Bhettree" parganas in the State of Uttar Pradesh under section 4 of the Act. By the preamble. it was recited that the Act was enacted to provide for the abolition of the 222 zamindari system which involved intermediaries between the tiller of the soil and the State and for the acquisition of their rights, title and interest and to reform the Law relating to land tenure consequent upon such abolition and acquisition and to make provision for other matters connected therewith. By s.3 (8) which was retrospectively are ended by Act 14 of 1958, , 'estate" was defined as meaning the area included under one entry in any of the registers described in cls. (a) to (d) and in so far as it relates to a permanent tenure holder in any register described in el. (e) of section 32 of the U. P. Land Revenue Act 1901 as it stood immediately prior to the coming into force of the Act or subject to the restrictions mentioned with respect to the register described in el. (e) in any of the registers maintained under any other Act, Rule, Regulation or Order relating to the preparation or maintenance of record of rights in force at any time and included share in or of an estate. " 'Intermediary" was defined as meaning with reference to any estate, a proprietor, under proprie tor, sub proprietor, the kadar, permanent lessees in Avadh and permanent tenure holder of such estate or part thereof. "Land" was defined as meaning,, except in sections 143 and 144, as land held or occupied for purposes connected with agriculture, horticulture or animal husbandry which included pisciculture and poultry farming. By s.4, provision was made for vesting of estates in the State of Uttar Pradesh. By sub s.(1), it was enacted, insofar as it is material, that the State Government may by notification declare that as from a date to. be specified, all estates situate in Uttar Pradesh shall vest in the State and from the date so specified, all such estates shall stand transferred to and vest, except as provided in the Act, in the State free from all encumbrances. Section 6 provided for the consequences of an estate in the State. On the publication of a notification under section 4 of the Act, notwithstanding anything contained in any contract or document or in any other law for the time being in force and, nave as 223 otherwise provided in the Act, the consequences set forth in cls.(a) to (j) of section 6 were to ensue in the area to which the notification related. By cl.(a), all rights, title and interest of intermediaries in every estate in such area and in the sub soil in such estate including rights, if any, in mines and minerals ceased and vested in the State. Clause (b) on which the dispute primarily turns, provided : "All grants and confirmations of title of or to land in any estate so acquired, or of or to any right or privilege in respect of such land or its land revenue shall, whether liable to resumption or not determine." By cl. (c), all rents, local rates and sayar in respect of any estate or holding therein for any period after the date of vesting and which, but for the acquisition, would be payable to an intermediary, vested in and became payable to the State Government and not to the intermediary ; and where under an agreement or contract made before the date of vesting any rent, cess, local rate or sayar for any period after that date had been paid to or compounded or released by an intermediary, the same, notwithstanding the agreement or the contract, became recoverable by the State Government from the intermediary. By cls. (d) and (e), liability of intermediaries in respect of any estate incurred for any period prior to the date of vesting remained enforceable. By cl. (f), the interest of intermediaries in any estate was exempt, from attachment or sale in execution of any decree or other process of any court and any attachment existing at the date of vesting or any order for Attachment passed before such date, subject to the provisions of section 73 of the , ceased to be in force. By cl. (a), mortgages with possession on any estate or part of an estate on the date immediately preceding the date of vesting were to be deemed to have been substituted by simple mortgages without prejudice to the rights 224 of the State Government '. By el. (h), no claim or liability enforceable or incurred before the date of vesting by or against an intermediary for any money charged on or secured by a mortgage of an estate or part thereof was, except as provided in 73 of the , to be enforceable against his interest, in the estate. By el. (i), all suits and proceedings of the nature to be prescribed pending in any court at the date of vesting and. ' all proceedings upto any, decree or order passed in any such suitor proceeding previous to the, date of vesting were stayed. By cl. (j), all mahals and their subdivisions existing on the date immediately preceding the date of vesting and all engagements for the payment of land revenue or rent by a proprietor, under proprietor, sub proprietor co sharer, or lambardar as such determined and ceased to be in force. Section 37 to 40 of the Act provided for the preparation of the Compensation Assessment Roll of intermediaries as respects mahals and for preparation of gross assets of mahals. It was on this Compensation Assessment Roll that the compensation payable for loss of interest of the intermediaries was to be computed and paid. Section 42 provided for computation of gross assets of an intermediary and section 44 for computation of the net assets of an intermediary. Section 45 provided that in the case of proprietors to whom section 78 of the U.P. Land Revenue Act, 1901 applied or who were as. signers of land revenue whose. names were recorded in the record of rights, maintained under cls. (a) to (d) of section 32 of the said Act, under proprietors, sub proprietors, permanent tenure holders and, permanent lessees in Avadh, the provisions of sections 39 to 44 were to apply subject to such incidental changes and modifications as may he Prescribed and the gross assets and net assets of such intermediaries were to be computed accordingly. ' 225 By the definition, in section 3 (8) of the Act an "estate" is an area included under one entry in the registers described in cls.(a) to (d) of the Land Revenue Act. The High Court upheld the contention of the respondent that allowance paid to him could not be regarded as an "estate". That view is not challenged before this Court by counsel for the State of Uttar Pradesh. The right to receive the allowance of Rs. 30,612 8 0 from the Government under the arrangement cannot, in the absence of an express provision to that effect, be called "an area included under one entry in any of the registers" described in the various clauses. The first part of section 6(b) does not therefore assist the claim made by the State. But of the 12 mahals the respondent was a proprietor : the land of the mahals was "estate" within the meaning of section 3(8) of the Act and by section 4, the right of the respondent in that estate stood vested in and transferred to the State. It is true that by the arrangement of the year 1838, confirming the earlier compromise, remission of 25% as granted to the respondent 's predecessors in respect of payment of land revenue. If the right of the respondent in the 12 mahals ceased, the right to remission could not be converted into a positive right to receive the amount thereof, notwithstanding the extinction of his right in those 12 mahals. The right to remission of land revenue was a right in respect of land revenue in the estate which stood vested in the State. The letters dated September 13, 1837, October 19, 1837 and June 15, 1838 make it abundantly clear that the difference of Rs. 5710 between the amount originally assessed and the Jamma recoverable was to be remission of revenue. The right of the respondent to the 12 mahals was transferred to the State by virtue of the notification under section 4, and the consequences set out in sub section (b) of section 6 relating to those 12 mahals ensued. We are therefore unable to agree with the 226 High Court that for the amount of Rs. 6710 which was treated as remissions the respondent was entitled to obtain relief on the footing that right was not affected by the issue of the notification under section 4 of the Act. The claim of the respondent in respect of the allowance granted as consideration for abandonment of the right to 166 mahals rests on a firmer ground. It is true that this allowance ",as computed as 1/4th share of the revenue assessed on the 166 mahals. But the respondent under the arrangement has no interest in the land of the 166 mahals or in the land revenue payable in respect thereof. By the order of the Government, the right of Sheo Narain Singh to the entire pargana "Syudpore Bhettree" was resumed. Sheo Narain Singh challenged the authority of the Government to resume his interest in the Jagir and dispute pending in the civil court was compromised on the terms which were finalised in the year 1838 whereby Harnaram Singh and his descendants were given an allowance in amount equal to 1/4th of the net revenue of the 166 mahals. Because the annual allowance is equal to a fourth share of the net revenue of the mahals, the right of the respondent does not acquire the character of an interest in land or in land revenue. Under the arrangement, the entire land revenue was to be collected by the Government and in the collection Harnarain Singh and his descendants had no interest or obligation. As a consideration for relinquishing the right to the land and the revenue thereof, the respondent and his ancestors were given an allowance of Rs. 30,612 13 0. The allowance was in a sense related to the land revenue assessed on the land, i.e., it was fixed as a percentage of the land revenue : but the percentage was merely a measure, and indicated the source of the right in lieu of which the allowance was given. The amount is described as "pension" in the letters dated September 14, 1838, July 7, 1837 and June 15,1838. The words used in el. (b) are undoubtedly wide 227 any right to a grant which has relation to land or land revenue would be determined by the operation of that clause. But the allowance to Harnarain Singh was not in respect of land or its revenue; it was granted as consideration for settlement of a claim litigated in a civil court relating to that land. The primary object of the legislature, as set out in the preamble of the Act, was to abolish the zamindari system and to acquire the rights of the intermediaries and to pay compensation for acquisition of those rights. By section 4, estates in the area for which a notification was issued, vest in the State free from all encumbrances and as a consequence of vesting, the rights of intermediaries, but not their preexisting liabilities are extinguished as from the date of vesting. Clauses (a),(c) to (f) and (b) expressly deal with the rights and obligations of interme diaries, and the interaction thereon of the notification of vesting. Clause (g) deals with the derivative rights of mortgagees of estates. By el. (i), the mahals and sub divisions are obliterated, and the engagements for payment of land revenue or rent by proprietors, under proprietors, sub proprietors, co sharers and sub sharers cease. There is no express reference in section 6 (b) to the right of intermediaries ; by the first part of that clause, the grant and confirmation of title to land in an estate are determined and by the second part, the rights and privileges in land or in the land revenue in the estates are determined. The key words of the second part of the clause are "in respect of" indicating a direct connection between a right or privilege and land in an estate or its revenue. The intention of the legislature is manifestly to extinguish estates and all derivative rights in estates and to extinguish the interest of intermediaries between the State and the tiller of the soil. If the grant or confirmation of title is in respect of a right or privilege to land in an estate or its revenue, it must determine under cl. (b) ; but a right to receive an allowance which is 228 granted in consideration of extinction of a right to land or land revenue does not, by the force of cl. (b) determine. The allowance has not the quality of land or land revenue : its quantum only was measured by equating it with a fourth share in the net revenue of a part of land which was the subject matter of the suit in which the arrangement for payment of the allowance was made. Absence of a provision in the Act for payment of compensation for a right such as the one claimed by the respondent strongly supports the plea that the right is not intended to be acquired or extinguished. Section 37 to 44 deal with the assessment of compensation to be paid to intermediaries. Compensation Assessment Roll of intermediaries in respect of the mahals has to be prepared and detailed instructions in that behalf are contained in sections 39 to 44. By section 45, in computing the gross assets and net assets of proprietors who are assignees of land revenue and of under proprietors, sub proprietors, permanent tenure holders and permanent lessees in Avadh sections 39 to 44 of the Act are applicable subject to such modifications and incidental changes as may be prescribed. It is common ground that s.78 of the U. P. Land Revenue Act has no application to "Syudpore Bhettree" pargana. To proprietors who are assignees of land revenue and whose names are recorded in the record of rights maintained under s.32 cls. (a) to (d), the provisions of ss 39 to 44 may undoubtedly apply subject to modifications as may be prescribed, and computation of their gross and net assets may be made accordingly. But the respondent is not an assignee of land revenue whose name is so recorded in the record of rights nor is he qua the allowance an under proprietor, sub proprietor, permanent tenure holder or permanent lessee. Section 45 is a machinery provision : it does not purport to extend the field of s.6 by prescribing consequences which are not incorporated in that section. There is in s.45 nothing to warrant the submission of counsel for the State that rights of a 229 land holder to receive allowances from the Government are extinguished even without compensation, merely because he was an assignee of land revenue of some land or was a proprietor, sub proprietor, permanent tenure holder or permanent lessee in respect of other land in Avadh. The scheme for payment of compensation prescribed by sections 39 to 44 is extended to amongst others, proprietors of land who are assignees of land revenue whose names are recorded in the record of rights maintained under cls. (a) to (d) of s.32 : but, a person receiving an allowance from the State of the character received by the respondent is not a proprietor who is an assignee of land revenue, and in any event, if his name is not entered in the revenue record under cls. (a) to (d) of s.32, the provisions relating to computation of gross and net assets will not apply to him. Absence of a provision in the Act for awarding compensation to persons holding interest such as the respondent has strongly supports the view that such interest was not to be extinguished by the operation of s.6(b) of Act 1 of 1951. We accordingly hold that the High Court was right in granting the application preferred by the respondent insofar as it related to the allowance of Rs. 30,612 13 0 granted as a consideration for extinction of the right of Harnarain Singh to 166 mahals : but for reasons already stated, we are unable to agree with the High Court that the respondent was entitled to receive in respect of the 12 mahals the land revenue which was remitted. The order passed by the High Court will therefore be modified and the petition of the respondent in so far as it deals with remission of land revenue in respect of the 12 mahals of "Syudpore Bhettree" will stand dismissed. The order of the High Court in respect of the allowance of Rs. 30,612 13 0 will stand confirmed. Subject to the above modifications, the appeal will stand dismissed with costs. Appeal dismissed.

By the order of the then Government the right of S, an ancestor of the respondent, to the entire parganas "Syudpore Bhettree" was resumed. S challenged in a civil court the authority of the Government to resume his interest in the jagir. During the pendency of the dispute, settlement proceedings were commenced and in 1832 the Settlement Officer reported that to 166 mahals of the "Syudpore Bhettree" pargana, the village zamindars had established their proprietary rights and only on 12 mahals the proprietary right of S had been established. The dispute pending in the Civil Court was compromised, and the terms were finalised in 1838 with H, son of S (who had died in the meantime). The terms, inter alia, were that for 214 166 mahals settled with the Zamindars, H, and his heirs in perpetuity, be paid annually a pension of 1/4th of the collections after deducting the Tehsildari charges and for 12 mahals settled with H allowance be made in the form of remission of 1/4th of the revenue assessed. The Government under the settlement intended to give a clear fourth of the net revenue of the parganas as pension. The allowance and/ or pension was paid through Treasury Office year after year from 1838 to H and his descendants. In 1951 the U.P. Legislature enacted the Uttar Pradesh Zamindari Abolition and Land Reforms Act 1 of 1951, and under s.6(b) of the Act the revenue authorities stopped payment of the allowance to the respondent. The respondent claimed that by virtue of the notification issued under s.4 of the Act his right to receive pension did not cease because the pension was neither land nor immovable property nor an estate within the meaning of the Act and being merely compensation payable to him in lieu of the rights of his ancestors over the estates comprised within the pargana "Syudpore Bhettree", it was not liable to vest in the State. Held, that the right to receive the allowance of Rs.30,612 8 0 for 166 mahals from the Government under the, arrangement was not in respect of land or its revenue; it was granted as consideration for settlement of a claim litigated in a civil court relating to that land, and could not in the absence of an express provision to that effect be called "an area included under one entry in any of the registers" described in various clauses, (a) to (d) of s.32 of the U.P. Land Revenue Act, 1901. The intention of the Legislature was to extinguish estates and all derivative rights in estates and to extinguish the interest of intermediaries between the State and the tiller of the soil. The grant of confirmation of title which is in respect of a right or privilege to land in an estate or its revenue; it must determine under cl.(b) of s.6 of the Act; but a right to receive an allowance granted in consideration of extinction of a right to land or land revenue does not by the force of cl. (b) determine. The allowance has not the quality of land or land revenue; its quantum only was measured by equating it with a fourth share in the net revenue of a part of land which was the subject matter of the suit in which arrangement for payment of the allowance was made. A person receiving an allowance from the State in consideration "of extinction of a right to land or land revenue is not a proprietor who is an assignee of land revenue," and in particular if his name is not entered in the revenue record under cls.(a) to (d) of s.32 of the U.P. Land Revenue Act, 1901, the provisions relating to computation of gross and net assets will not apply to him. The Act does not intend to extinguish the right to receive allowance granted in 21 considerations of extinction of right to land or land revenue by the operation of s.6(b) of the Act 1 of 1951. Held, further, that the respondent was a proprietor of the 12 mahals, of the "Syudpore Bhettree" Parganas. The said 12 mahals were an "estate" within the meaning of s.3(8) of the Act and by section 4 the right of the respondent in that estate stood vested in and transferred to the State. The right of the respondent in the 12 mahals having ceased, the right of remission could not be converted into a positive right to receive the amount thereof.

vil ,Appeal No. 2525 of 1966. Appeal from the judgment and order dated October 30, 1963 of the Gujarat High Court in Special Civil Application No. 94 of 1962. C.K. Daphtary, Attorney General and 1. N. Shroff, for the appellant. H.R. Gokhale, S.B. Vakil, Janendralal and B.R. Agarwala, for the respondent. The Judgment of the Court was delivered by Hegde J. The only question that falls for decision in this appeal is whether on the basis of the notice issued by the Bombay State Electricity Board on January 8, 1959 under section 7 of the (to be hereinafter referred to as the: Act) prior to its amendment in 1959, the appellant can compulsorily purchase from the respondent his concern 'The Bilimora Electric Power Supply Co. '. In his application before the High Court under article 226 of the Constitution the respondent challenged the vires of section 7 of the Act. But that contention remains to be examined. The High Court has chosen to allow the petition. solely on the ground that as the requirements of section 7 have not been complied with, the appellant cannot compel the respondent to sell the undertaking. If we come to the conclusion that that conclusion is unsustainable then the matter will have to go back to the High Court for deciding the constitutionality of section 7. The respendent was given a licenee on. February 11, 1932, under the provisions of the Baroda Electricity Act Samvat 1983 for supplying electricity within the area mentioned. in the licenee. Clause 27 of that licenee provided that the option of purchase 582 given by section 9 of the Baroda Electricity Act shall be exercisable first on the expiration of thirty years computed from the commencement of the licence and thereafter on the expiration of every subsequent period of ten years during the subsistence of the licence. The manner in which the undertaking should be valued is laid down in that Act. On the merger of the former Baroda State with the Province of Bombay, the Act as well as the (Act 54 of 1948) were made applicable to the territories of the former State of Baroda, and the corresponding Baroda Acts were repealed with the saving clause that the licences issued under the repealed Act shall continue to remain in force as if issued under the Act, until the expiration of the period of those licences. In exercise of the powers conferred by section 5 of the Electricity Supply Act, 1948 the Government of Bombay constituted the Bombay State Electricity Board on January 31, 1945. On January 8, 1959 that Board issued to the respondent a notice under section 7 of the Act. That notice is important for our present purpose. Hence we shall quote the relevant portion thereof. It runs thus: "In exercise of the powers conferred on the Bombay State Electricity Board by virtue of section 71 of the Electri city (Supply) Act, 1948 read with section 7 of the , you are hereby notified that the Bombay State Electricity Board has decided to exercise and shall exercise the option of purchasing your under taking on the expiry on 10 2 1962 of the licence granted to you . The receipt of this notice may please be acknowledged. " As a result of the Bombay Re organization Act, 1960, the present Gujarat State came into existence. In exercise of the powers conferred by section 5 of the read with sub section 4 of section 68 of the Bombay Reorganization Act, 1960 the appellant Corporation was constituted by the Government of Gujarat by means of a notification dated May 1, 1960. The Central Government by the notification No. EL 1I 1(22)/60 dated the 17th June, 1960 made in exercise of the powers conferred by cl. (a) of sub section (4) of section 68 of the Bombay Reorganization Act, 1960 directed that the appellant Corporation shall "with effect from 1st May 1960" take over from the Bombay State Electricity Board all its undertakings, assets, rights and liabilities in the area comprised in the State of Gujarat. The said notification was amended in some respect by notification of the Government of India dated October 3, 1960 providing therein that the amendment thereby made in the notification dated June 17, 1960 shall be deemed always to have been made. On the basis of the aforementioned notifications, the appellant is claiming the right to compulsorily purchase the undertaking. 583 The respondent is contesting the right of the appellant to compulsorily purchase his undertaking. With a view to forestall the appellant from taking action against him, the respondent an application under article 226 of the Constitution in the High Court of Gujarat seeking directions to the appellant to forbear from compelling him to sell or deliver his undertaking, refrain the appellant from ceasing to supply electricity to him for the purpose of his said undertaking and also refrain the appellant from preventing him from supplying electric energy in the area mentioned in his licence. Some other incidental reliefs were also sought. The High Court came to the conclusion that though the notice issued by the appellant on January 8, 1959 is a valid notice under section 7(4) of the Act but that by itself is not sufficient to compel the respondent to sell his undertaking to the appellant; before the respondent can be compelled to sell his undertaking to the appellant it was necessary for the appellant to exercise its option to purchase the undertaking on the expiration of the period of licence. As the appellant had failed to exercise that option on the expiration of the period of licence it cannot compel the respondent to sell his undertaking. On the basis of these findings the High Court has substantially granted the relief prayed for by the respondent. The appellant challenged the correctness of this conclusion. On the other hand the respondent is supporting the judgment of the High Court not only on the ground accepted by the High Court but also on some of the other grounds advanced on his behalf before the High Court but rejected by that Court. We shall first take up the question whether the High Court was right in holding that the appellant had to take two independent steps viz. ( 1 ) an election to purchase the undertaking followed up by a notice to the respondent in pursuance of that election within the period mentioned in section 7(4) of the Act and (2) exercise its option to purchase on the expiration of the period of licence and communicate the same to the respondent. Before addressing ourselves to that question it is necessary to mention that the High Court 's finding that the rights of the Shriman Sarkar, (Baroda Government) to purchase the undertaking under section 9 of the Baroda Electricity Act had devolved on the State Government was not challenged before us. Therefore it is not necessary for us to trace how the rights of the Baroda Government came to devolve on the then State of Bombay. But the respondent did contest the appellant 's claim to exercise that right. That question we shall separately consider. For the present we shall proceed on the basis that the appellant is entitled to exercise the right of purchase conferred on the Baroda Government under the licence read with section 9 of the Baroda Electricity 584 Act. We may also state at this stage that the conclusion of the High Court that the licence issued under s, 9 of the Baroda Electricity Act should be considered as a licence issued under section 7 of the Act was also not challenged before us. Now we shall proceed to consider the true scope of section 7 of the Act. For our present purpose only sub sections 1, 2 and 4 of section 7 of the Act are relevant. They read as follows: "Section 7 ( 1 ). Where a license has been granted to any person not being a local authority, and the whole of the area of supply is included in the area for which a single local authority is constituted, the local authority shall, on the expiration of such period, not exceeding fifty years and of every such subsequent period not exceeding twenty years, as shall be specified in this behalf in the license, have the option of purchasing the undertaking, and, ff the local a uthority, with the previous sanction of the State Government, elects to purchase, the licensec shall sell the undertaking to the local authority on payment of the value of all lands, buildings, works, materials and plant of the licensee suitable to, and used by him for, the purposes of the undertaking, other than a generating station declared by the license not to form part of the undertaking for the purpose of purchase,. such value to be, in case of difference or dispute, determined by arbitration: (4) Not less than two years ' notice in writing of any election to purchase under this section shall be served upon the licensee by the local authority or the State Government as the case may be. In our opinion sub section (4 ) of section 7 is complementary to sub as. (1) and (2) of that Section and therefore they must be read together. On an analysis of these provisions it is seen that before a licensec can be compelled to sell his undertaking, the authority entitled to purchase must elect to purchase the same by exercise of the option given to it under the licence read with section 7 of the Act followed by a notice as required by section 7 (4) of the Act. In section 7 the expression "option of purchasing an undertaking" merely means the right of purchasing the undertaking. The word 'option ' is 'used because two courses are open to the concerned authority namely, either to purchase the undertaking or renew the licenee. Once the authority elects to purchase then, the notice prescribed in sub section 4 should be given before the period mentioned thereto. We are not able to agree with the High Court that the Section contemplates two stages namely (1) to elect to purchase the 585 undertaking at least two years before the expiration of the licenee and (2 ) exercise the option to purchase at the end of the licence period. The exercise of option to purchase as well as electing to purchase is one integral process and not two independent steps. By the very act of electing to purchase the authority exercises its option to purchase. In our opinion sub sections 1, 2 and 4 of section 7 are plain and unambiguous. They do not lend them selves to any subtleties. In construing a provision, all its relevant parts should be considered together and their true effect ascertained. One can easily find out the reasons behind the procedure prescribed in section 7. In view of the term of the licenee read with section 7 (1 ) and (2 ) the concerned authority has two courses open before it. It can either decide to purchase the undertaking or renew the licence on the expiration of the period for which the licence is granted. The licensee must know in good time what course the authority is going to adopt so that he may so arrange his affairs as to Cause least inconvenience to himself. Hence though the power to exercise the option to purchase arises on the expiration of the period of licence as per the terms of the licenee, section 7 lays down that if the authority wants to purchase the undertaking it must elect to do so at least two years before the expiration of the licence and communicate the same to the licensec. Once the concerned authority exercises its option and communicates the same to the licensee, the same is binding on the authority as well as the licensec. Otherwise there is bound to be considerable inconvenience both to the licensee and to the public. We are not able to find any good reason for reading into section 7 a requirement that after a notice under section 7(4) is issued the authority must again exercise its option to purchase on the expiration of the period of licence. It is no doubt true that the right to purchase the undertaking accrues only at the expiration of the period of licenee but for exercising that right, the authority must make its election within the period prescribed in section 7 (4) and issue a notice as required by that sub section. The requirements of section 7 were fully complied with by the notice issued by the Bombay State Electricity Board on January 8, 1959. We shall. now take up the other contention advanced by Mr. H.R. Gokhale, learned Counsel for the respondent in support of the decision under appeal. One of his contentions was that whether the State Government was competent to purchase the undertaking or not, neither the Bombay State Electricity Board nor the appellant was competent to exercise that right. His .argument on this question proceeds thus: Section 7(1) prior to its amendment in 1959 empowered the local authority or the State Government to make the purchase 586 contemplated under that Section; the Electricity Board is not within the contemplation of that Section; the finding of the High Court that the provisions contained in sub sections 1, 2 and 4 of section 7 of the Act read with section 71 of the , confers on the appellant such a power is not correct because the right or option to purchase the undertaking was conferred on the State Government or the appropriate local authority under the licence and not under the provisions of the Act; in other words the said right is merely a contractual right and not a right flowing from the provisions contained in section 7 of the Act as. held by this Court in Fazilka Electric Supply Co., Ltd. vs The Commr. of Income Tax, Delhi(1) and therefore the appellant cannot take any assistance from section 71 of the . This contention did not commend itself to the High Court. We shall now proceed to examine how far the same is correct. Section 71 of the provides: "Rights and options to purchase under Act 9 of 1910 to vest in Board. Where under the provisions of the Indian Electricty Act, 1910 (9 of 1910), any right or option to purchase the undertaking of a licensec vests in the State Government or a local authority such right or option shall be deemed to be transferred to the Board, and shall be exercisable by the Board in accor dance with the provisions of the said Act applicable to the exercise of such right or option by the State Government or a local authority, as the case may be." Board is defined in section 2(2) of that Act as meaning, State Electricity Board constituted under section 5 thereof. It is true that before section 71 can be held to be attracted to a case it must be shown that the right or option to purchase the undertaking of the licensec vested in the State Government or a local authority under the provisions of the Act. It is also true that this Court had held in. Fazilka Electric Supply Company 's(x) case that from the provisions of the Act read with the rules made thereunder it is manifest that the condition as to the option of purchase either by the local authority or by the Government is the result of an agreement between the applicant who had applied for licenee and the Government who granted the licenee. In that case this Court was consideting whether the sale concerned in that case fell within the scope of section 10(2)(7) of the Indian Income Tax Act or whether it ' 'can be held 'to be compulsory acquisition as contended by the assessee. A sale compelled by law may also be a 'sale ' under the Sale of Goods Act. But that does not mean that the right to purchase the undertaking does not vest in the concerned authority (1) [1962] 3 Supp. S.C.R. 496. 587 by virtue of section 7. That right may accrue either because it is directly conferred by section 7 or because it is obtained as a result of a contract compelled by that Section. In either case it is a right obtained by the authority by virtue of section 7. There is no dispute that the licence granted must conform to the requirements of section 7. In Okara Electric Supply Ltd. and Anr. vs State of Punlab(1) this Court observed that sections 5,. 6 and 7 show that in the case of a licensee, specific provisions have been made for the acquisition of the undertaking in cases of revocation or cancellation of licenses. For the aforementioned reasons we hold that appellant had acquired the right to purchase the undertaking by the combined operation of section 7 of the Act and section 71 of the . It was next contended on behalf of the respondent that by the time the licence period expired, section 7 of the Act had been amended and section 71 of the Electric (Supply) Act, 1948 repealed, no provision was made to preserve the rights already acquired under those provisions, hence the appellant is not entitled to purchase the undertaking. It is not the case of the respondent that either expressly or by necessary implication, the new law had taken away the right acquired earlier. That being so section 6 of the General Clauses Act comes to the aid of the appellant. That Section provides that where that Act or any Central Act or Regulation made after the commencement of that Act repeals an enactment hitherto made or hereafter to be made then unless a different intention appears, the repeal shall not affect any right, privilege, obligation or liability acquired, 'accrued or incurred under any enactment so repealed. It also saves the previous operation of any enactment so repealed or anything duly done or suffered thereunder. The right to purchase the respondent 's undertaking came to vest firsfly in the Bombay State Electricity Board subsequently in the appellant in view. of the various notifications referred to earlier. That right has to be worked on the basis of law as it stood on the date the notice under section 7(4) of the Act was given. In this Court a new contention was taken on behalf of the respondent namely that in any case, the appellant 's right to purchase is conditional on the payment of the price as provided in section 7 and hence the appellant cannot demand possession of the undertaking without paying the price after the same is determined according to law. This contention had not been taken before the High Court. The High Court may go into this question while deciding the writ petition. ; 588 For the reasons mentioned earlier we allow this appeal, set aside the order of the High Court and remit the case back to High Court for deciding the issues that were left open. Costs of this appeal shall be costs in the cause. G.C. Appeal allowed.

On January 8, 1959 the Bombay State Electricity Board purporting to exercise its powers under section 7 of the read with section 71 of the gave notice to the res pondent that it would exercise its option of purchasing the electric supply undertaking which the respondent ran under a licence, on the expiry of the said licenee on February 10, 1962. On the creation of the State of Gujarat the appellant corpOration was formed and succeeded to the rights and liabilities of the Bombay State Electricity Board. The respondent filed a writ petition in the High Court in which he challenged the right of the appellant to purchase his undertaking. The High Court came to the conclusion that though the notice issued on January 8, 1959 was a valid notice under section 7(4) of the Act that by itself was not sufficient to compel the respondent to sell his undertaking to the appellant; before the respondent could be compelled to sell his undertaking it was necessary for the appellant to exercise its option to purchase the undertaking on the expiration of the period of licenee, which it had not done. respondent 's writ petition was therefore allowed. The appellant came to this Court. The questions that fell for consideration were: (i) whether the High Court 's interpretation of section 7 was correct; (ii) whether the appellant was empowered under section 71 of the to exercise the powers of the local authority under section 7. HELD: (i) The provisions of the sub section of section 7 must be read together. So read the section only means that before a licensee can be compelled to sell his undertaking the authority entitled to purchase must elect to purchase the same by exercise of the option given to it under the licence read with section 7 of the Act followed by a notice as required by section 7(4) of the Act. In section 7 the expression 'option of purchasing an undertaking ' merely means the right of purchasing the undertaking. The word 'option ' is used because two courses are open to the concerned authority namely. either to purchase the undertaking or renew the licence. Once the authority elects to purchase then the notice prescribed in subs. 4 should be given before the period mentioned therein. The object of the provision is that the licensee must know in good time what course authority is going to adopt. Otherwise there is bound to be considerable inconvenience to the licensec as well as to the public. [584 F H, 585 C D] There is no good reason for reading into section 7 a requirement that after a notice under section 7 (4) is issued the authority must again exercise its option to purchase on the expiration of the period of license. The exercise of option to purchase as well as electing to purchase is one integral process and not two independent steps. By the very act of electing to purchase the authority exercises its option to purchase. , [585,E F] 581 In the present case therefore the requirements of section 7 were fully complied with by the notice issued on January 8, 1954. [585 F G] (ii) It is true that before section 71 can be held to be attracted to a case it must be shown that the right or option. to purchase the undertaking of the licensee vested in the State Government or a local authority under the provisions of the Act. In the present case the right to purchase vested in the concerned authority by virtue of section 7, and it could not be said that the right accrued only by virtue of the agreement under which the licence was granted. The right to purchase may accrue either because it is directly conferred by section 7 or because it is obtained as a result of a contract compelled by that section. In either case it is a 'right obtained by the authority by virtue of section 7. The appellant Board was therefore empowered by section 071 to issue the notice under section 7. [586 F 587 A] Fazilka Electric Supply Co. Ltd. vs The Commr. of Income tax, Delhi, [1962] 3 Supp. S.C.R. 496, distinguished. Okara Electric Supply Ltd. & Anr. vs State of Punjab, ; applied.

Appeal No. 147 of 1958. Appeal from the judgment and decree dated January 4, 1955, of the Allahabad High Court in Special Appeal No. 36 of 1955. A. V. Viswanatha Sastri, C. P. Lal and G. C. Mathur, for the appellants. K. B. Bagchi, section N. Mukherjee for P. K. Bose, for the respondent No. 1. 1961. April 18. The Judgment of the Court was delivered by SUBBA RAO, J. This appeal by certificate raises the question of construction of a will executed by one Pyare Mohan Bannerji. 29 The facts giving rise to this appeal lie in a small compass and they are as follows: Pyare Mohan Bannerji died in October 1874 leaving behind him considerable property. He executed a will dated February 12, 1874, making various bequests, including the payment of certain amounts to the first respondent, Uttar para Hitakari Sabha. After his death, his widow held the property for life till her death on March 25, 1945. Thereafter, the property went into the possession of the appellants, who are the heirs at law of the testator. On March 17, 1950, the first respondent, Uttarpara Hitakari Sabha (hereinafter referred to as the Sabha) filed an application in the High Court of Judicature at Allahabad under section 10 of the Official Trustees Act (Act II of 1913) claiming that the late Pyare Mohan Bannerji had created a trust by his will and praying that an official trustee be appointed to be the trustee of the properties of the trust. This was registered as Testamentary Case No. 9 of 1950. The appellants contested the claim of the Sabha and contended, inter alia, that no trust had been created by the testator and that the appellants, being the legal heirs of the testator, were entitled to succeed to the entire pro perty left by him. Mootham, J., as he then was, who heard the said case at the first instance, held that by his last will Pyare Mohan Bannerji created a trust in favour of the Sabha, and appointed the Official Trustee a trustee of all the properties left by Pyare Mohan Bannerji specified in Schedule B to the petition. On appeal, a division bench of the said High Court, consisting of Malik, C. J., and Agarwala, J., agreed with Mootham, C. J., that the will created a trust in favour of the Sabha; but the learned Judges held that the Sabha was entitled only to a half share in the cash and properties pertaining to the estate of the said testator, and appointed the Official Trustee as trustee only in regard to the said share: on that basis, suitable directions were given. The first respondent accepted that position, but the appellants, i.e., the persons claiming to be the heirs at law, preferred the present appeal against the judgment of the High Court in so far as it went against them. 30 Learned counsel for the appellants contends that under the will not a trust but only a charge was created in favour of the first respondent and, therefore, the first respondent could not invoke in aid the provisions of section 10 of the Act. Section 10 of the Act reads: "(1) If any property is subject to a trust other than a trust which the Official Trustee is prohibited from accepting under the provisions of this Act, and there is no trustee within the local limits of the ordinary or extraordinary original civil jurisdiction of the High Court willing or capable to act in the trust, the High Court may on application make an order for the appointment of the Official Trustee by that name with his consent to be the trustee of such property. " It is common case that if the will created a trust, it would not fall under any one of the exceptions mentioned in the section. Therefore, the only question is whether the will created a trust or a charge in favour of the first respondent. The concepts of trust and charge are well defined. A trust is "an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner or declared and accepted by him, for the benefit of another, or of another and the owner. " Where property "of one person is made security for the payment of money to another, the latter person is said to have a charge on the property. " The boundaries between the two concepts are well demarcated; but, more often than not, courts found considerable difficulty in construing a particular document to place it in one or other of the categories. The same difficulty was encountered even in England. The test laid down for marking out the one from the other by some of the authoritative text books on the subject may be useful in construing the will in question. In Halsbury 's Laws of England, 2nd Edn. 33 (Lord Hailsham), the distinction between the two concepts has been stated thus at p. 98: "Where property is given to a person upon condition that he does a certain act or confers a 31 certain benefit on another person, the condition may constitutes a trust if it is directed to be, or must necessarily be, performed and satisfied out of the property, and consequently imposes a fiduciary obliga tion in respect of the property; but it will not be construed as a trust if this is not the case and the condition merely imposes a collateral duty. Similarly, a devise of land upon condition of paying a sum of money or an annuity does not create a trust, though it may create a charge. A charge does not in itself create a trust, but it may do so if it is coupled with other trusts or the context, otherwise so requires. Conversely a trust may amount merely to a charge." Lord St. Leonards points out (Sugden on Powers, 7th Edn., p. 122) that, "What by the old law was deemed a devise upon condition, would now, perhaps, in almost every case be construed as a devise in fee upon trust, and by this construction, instead of the heir taking advantage of the condition broken, the cestui que trust can compel an observance of the trust by suit in equity. " In The Commissioners of Charitable Donations and Bequests vs Wybrants (1) a testator had devised lands to trustees and their heirs upon trust to grant and convey the same to the use of John Wybrants for life 'subject nevertheless to and charged and chargeable with ' four annuities, three of which were to be paid to charitable institutions and the fourth to the poor of a parish. In construing that provision, the Lord Chancellor said at p. 285: "It certainly is not necessary to use the word 'trust ' in order to create an express trust. I do not intend to lay it down that every charge creates a trust, although it imposes a burden; but a charge may create a trust; depending on the nature of the charge. In Bailey vs Ekins (2) Lord Elton said he was confident Lord Thurlow 's opinion was that a charge (of debts) is a devise of the estate, in substance and effect, pro tanto upon trust to pay the (1) (1845) 69 R.R. 278. (2) , 323. 32 debts:and this is supported by the current of authorities. The principle is no less powerful in the case of charities, particularly where the charity is to a fluctuating, uncertain body, like the poor of a parish. The testator gives the estate to one, subject to this charge. Who is to pay the annuities but the person who is liable to the burden: and this, in the case of a charity, impresses him with the character of a trustee for the charity. By the ancient rule of equity, no one could acquire an estate, with notice of a charitable use, without being liable to it. " The fact that a beneficial interest is also created in favour of the trustees in respect of the property subject to a trust does not make the transaction any the less a trust. The law permits a person to bequeath his property to another subject to a trust in respect of a portion of the income in favour of a third party or a charity. On this subject in Lewin on Trusts, it is stated at P. 133: "Upon this subject a distinction must be observed between a devise to a person for a particular purpose with no intention of conferring the beneficial interest, and a devise with the view of conferring the beneficial interest, but subject to a particular injunction. " So too, Tudor in his book on Charities, 5th Edn., says much to the same effect at p. 52: "A charitable trust may be made to attach to a part of the property only, or it may be limited to particular payments directed to be made out of the income, as in the numerous cases where property has been given to a college, or municipal corporation, or city guild, upon trust or to the intent that certain specified charitable payments shall be made or subject to or charged with certain charitable payments. In these cases, as will be seen, the donees as a rule take beneficially, subject only to the specified charitable payments. " The said tests may afford a guide to ascertain whether a document creates a charge or a trust; but they are subject to the fundamental rule of construction that a trust may be created in language sufficient 33 to show the intention, and no technical words are necessary; the said intention must be gathered from a fair reading of the provisions of the document. In the light of the foregoing discussion, let us look at the provisions of the will to ascertain the express intention of the testator. At the time the testator executed the will he had a wife, and a nephew by name Sital Prasad Chatterji, but no children. He had many other close relatives and dependents. He was also charitably disposed. He executed the will making suitable provision for his wife, nephew, relatives and for charities. He could carry out his intention in two ways: he could bequeath his entire property to his widow and nephew subject to a fiduciary obligation imposed on them to pay certain amounts to the relatives and the charities; or, he could give the entire property to his widow and nephew subject to the payment of certain amounts charged on the said property. The question is, what did he intend to do by this document? He did not use either the word "trust" or "charge" and, therefore, we must gather the intention only from the circumstances obtaining at the time the document was executed and the recitals found therein. Under the will the testator made the following bequests depending upon different contingencies: Firstly, the property was given to his wife and nephew in equal shares for their lifetime subject to the payment of all his debts, annuities and charges; it is also provided therein for the sale of a standing jungle in Doomree and Sukhiae in the Gorakhpore District for the purpose of discharging the debts. The second contingency related to the event of the testator and his nephew begetting son or sons; in that event, after the lifetime of his wife and nephew the son or sons of his nephew would get one fourth share subject to their paying one fourth of the annuities and charges, and whole of the remainder was given to his son or sons subject to their paying the remaining three fourths of the annuities and charges. The third contingency related to the testator getting no children, but his nephew having sons; in that event, after the 34 death of his wife and nephew, the whole of his property would go to the said son or sons subject to the said annuities and charges. In the event of the testator having children and the nephew having no son or sons, after the death of his wife and nephew, the property would go to his children subject to the payment of annuities and charges mentioned in the first portion of the will. The last contingency contemplated was that neither the testator nor his nephew had any issue; in that event the whole of the property was given to his legal heirs subject to the payment of annuities and charges. The quantum of bequests made in favour of the Sabha expanded from contingency to contingency. During the lifetime of the nephew and the widow, the said Sabha got rupees fifteen per month. In the event of either the testator or his nephew not having any children, the direction was that the said Sabha should get rupees fifty per month. In that contingency not only the said Sabha but any other institution which took its place ' would get the said amount. It was also mentioned that the amount should be given only to be spent in paying the school fees of indigent boys of Coterie reading in the Ooterpara School and whose parents or guardians might not have the means to pay their school fees. On the happening of the last contingency, that is, both the testator and his nephew dying without children, his legal heirs took the property subject to the payment of half of the net income to the said Sabha or any institution which might take its place. The said amount was directed to be paid thus: "Rupees fifty per month in payment of schooling fees of indigent boys of Ooterpara reading in the Ooterpara school and the balance, if any, as scholarships to persons resident of Ooterpara or failing such of Bengal who after passing the entrance examination of the Calcutta University may wish to learn practical agriculture or Chemistry or Mechanics. " At present it is common case that all the relatives for whom provision was made in the will passed away, that there are no daughters of testator 's nephew and that the Sabha is the only institution entitled to receive the 35 amounts provided for under the will. We are, therefore, only concerned with the question whether a trust was created in favour of the first respondent or not, on the happening of the last contingency, namely, the testator leaving no children and his nephew no sons. On the happening of that event the property passed to his legal heirs. When that stage was reached the testator was more interested in charities than to make provision for persons for whom he had love and affection. The amount was payable to the Sabha or any other institution which might take its place. Further, there was a direction that the said amount should be spent towards specified charitable purposes. The direction was couched in an elastic form to prevent the charitable object being defeated. The charity was conceived to be a permanent one and it was necessary that the regular payment of the amount was secured. It is, therefore, clear that under the will, on the happening of the said contingency, the testator clearly intended that his legal heirs should regularly pay half the net income to the first respondent so that the specified charities may be carried out perpetually. That object would not be achieved if the first respondent was placed in the position of a creditor with a charge on the property with an off chance of the charge being defeated by a bonafide purchaser for value of the property bequeathed to the legal heirs. Learned counsel emphasized the fact that under the will the first respondent had to spend the moneys for specified objects and not the legal heirs and contended that the first respondent might be in the position of a trustee in respect of the amounts received from the legal heirs, but the legal heirs were not trustees in respect of the charity. The question is not whether the legal heirs, or the first respondent, are the trustees in respect of the fund after it reached the hands of the first respondent; but the question is whether the legal heirs, as owners of the property, were under a fiduciary obligation to pay the said amount for charitable purposes. Having regard to the circumstances visualized at the time the last contingency happened, 36 the fluctuating amount the donees had to pay, the permanent nature of the charity and the declared intention of the testator to pay as much as half the net income towards the carrying out of the said charitable object, we hold that the legal heirs took the property of the testator subject to a trust rather than a charge. No other question arises in this appeal. For the foregoing reasons, we hold that the conclusion arrived at by the High Court is correct. In the result, the appeal fails and is dismissed with costs. Appeal dismissed.

One P died in 1874 leaving considerable property. He also left a will which provided for several contingencies; the first respondent was given an interest under each contingency which was enlarged from contingency to contingency. Under the last contingency which happened the entire property was given to the heirs with a direction that half of the income of the property be given to the first respondent. The heirs contended that the direction merely created a charge and not a trust of half of the property. Held, that the direction created a trust rather than a charge. The charity was conceived to be a permanent one and it was necessary to secure regular payments to it. The testator clearly intended that the heirs should regularly pay half the income to the first respondent so that the specified charities may be carried on perpetually. This object could not be achieved if the direction merely created a charge and not a trust. The Commissioners of Charitable Donations and Bequests vs Wybrants , (1845) 69 R. R. 278 and Bailey vs Ekins, 7 Ves. 319, referred to.

Civil Appeals Nos. 1741 and 1742 of 1981. From the Judgment and order dated 12.3.1981 of the Punjab and Haryana High Court in R.S.A. No. 1822 of 1978. Harbans Lal and Balmukand Goel for the Appellants. Anil Dev Singh, N.D. Garg and Rajiv Garg for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. How far an order directing eviction of a person by the Revenue Court under section 77(3) of the Punjab Tenancy Act, 1887 (hereinafter called 'the Act ') operates as res judicata for a title suit filed by a person claiming to be a mortgagee and not a tenant of the alleged landlord, is the question that arises in this appeal by special leave from the Full Bench decision of the High Court of Punjab and Haryana dated 12th March, 1981 in second appeal. By the impugned order and judgment the High Court has dismissed the appeal of the appellants and affirmed the judgment and order dated 7th September, 1978 of the Additional District Judge, Gurgaon reversing the judgment and order of Sub Judge 1st Class, Ballabgarh dated 4th of November, 1977 dismissing the suit of the respondent. It appears that the appellants filed proceedings in the Court of Assistant Collector, 1st Grade, Ballabgarh seeking ejectment of the respondent from his lands on 29th July, 1975 under section 77(3) proviso 2(e) of the Act on the ground that the respondent tenant had H 96 defaulted in the payment of rent. The suit was decreed on 29th October, 1976. In execution of the decree the respondent was ejected from the suit land. No appeal though provided under the said Act was filed by the respondent from the said decree. The resondent, however filed a suit in the civil court against the appellants alleging that he fact was a mortgagee in possession of the suit land and not a tenant and that the decree of ejectment dated 29th of October, 1976 by the Revenue Court was without jurisdiction and, therefore, a nullity. The respondent claimed to be restored the possession of the suit land from which he had been wrongly ousted by the Revenue Court. The suit was dismissed by the learned Subordinate Judge on 4th November, 1977 holding that the claim of the respondent to be a mortgagee in possession of the suit land was wrong and that the order of the Revenue Court was perfectly in order and was within that court 's jurisdictional competence. It was alleged that it was of binding nature on the respondent and was not capable to challenge the same in subsequent proceedings. The claim, it was asserted, by the respondent in the subsequent suit, was barred by the principles of res judicata. The respondent lost. He filed an appeal against the said order of the learned Subordinate Judge. The learned Additional District Judge, Gurgaon vide his order dated 7th September, 1978 reversed the findings of the trial court and decreed the suit of the respondent. Against the said order of the learned Additional District Judge the appellants filed Regular Second Appeals which were placed for disposal before one of the learned Judges of the High Court of Punjab and Haryana at Chandigarh. After hearing counsel for the parties the learned Judge was of the view that there were conflicting judgments on the points for determination in the case which were of importance and the matter was referred to the Hon 'ble the Chief Justice of the said High Court for the constitution of a larger bench for the determination of the points in controversy. The question referred to a larger bench was whether, the decision of Rent Controller under the Rent Control Laws or a Revenue Court under section 77 of the Punjab Tenancy Act upon the relationship of landlord and tenant between the parties operates as res judicata and is not open to challenge in a subsequent suit or in other collateral proceedings between the parties. The learned Chief Justice constituted a Full Bench of three learned Judges for resolving the conflict pointed out in the referring order. The three learned Judges of the Full Bench have given three separate judgment and ultimately the case came to be decided in accordance with the majority view. The order of the Full Bench was that in accordance with the majority view it was held that the decision of the Revenue Court under 97 Section 77 of the Punjab Tenancy Act upon the relationship of landlord and tenant between the parties would not operate as res judicata and it would be open to challenge in a subsequent suit or any other collateral proceedings between the parties. The Full Bench thereafter directed the matter to go back to the learned single Judge for disposal in accordance with the decision of the Full Bench. Aggrieved by the aforesaid order and decision the appellants have come up in appeal before this Court. It may be mentioned that of the three learned Judges, Sandhawalia, CJ. was of the view that it was to operate as res judicata, but the other two learned judges, namely, J.V. Gupta, J. and S.P. Goyal, J. held contrary views. It is the propriety and the validity of the majority view of the Full Bench which calls for an examination in this appeal. C In order to appreciate the controversy in appeal it is necessary to refer to the relevant provisions of the said Act. The preamble of the Act states that it was an Act to amend the law relating to the tenancy of land in Punjab. These provinces of Punjab had the distinction between the occupancy tenants and tenants at will with the rest of its early revenue Code from the United Provinces. The possession of a right to fixity of tenure by many cultivators in northern India was early recognised. Indeed the fact that in Lower Bengal the connection of persons whom were recognised as proprietors with the land was often far more recent than that of the cultivators inevitably suggested that the latter had rights in the soil that required protection. Fixity of tenure of resident cultivators at rents determined by authority was prominent feature of the Bengal settlement as originally planned. Regulation XXVIII of 1803 professed to extend the Bengal system to the North Western Provinces, but it left the subject of tenant right in a vague and uncertain condition. The provisions of Regulation VII of 1922 were more definite. By its 9th section Settlement officers were required not only to prepare a record of "persons enjoying the possession and property of the soil, or vested with any heritable or transferable interest" in it, that is to say, of proprietors, but also of "the rates per bigha . demandable from the resident cultivators not claiming any transferable property in the soil whether possessing the right of hereditary occupancy or not". It is not necessary to trace the history of these settlement laws which can be found in Douie 's Settlement Manual, 4th Edition. Twelve years ' uninterrupted possession of a holding at the same rate of rent was considered as a sufficient proof of occupancy right in the United Provinces. The twelve years ' rule was very generally adopted in early Punjab settlements, though the best H 98 revenue officers held that it should not be regarded as the sole criterion, and that the quality, as well as the length of occupation should be considered. The Act in question was passed to amend the law of tenancy in Punjab which was later the object of the Act to protect the tenants from the exactions of the landlords The tenants as usual in other parts of the world were in many cases peculiarly liable to oppression or duress from their landlords and in order to protect them quite effectively from the possibility of any such oppression or duress the Act was passed. The overall scheme of the Act is to provide speedy remedies with regard to disputes between the landlords and tenants and also under what circumstances that relationship comes to an end. It is appropriate to bear in mind the whole basic question involved in this appeal is whether the courts created by this Act have limited power and jurisdiction or plenary powers and jurisdiction. In this appeal we are concerned with the amplitude of the jurisdiction of the courts under section 77 of the Act which deals with Courts and suits cognizable by them. Relevant portion of section 77 of the Act provides as follows: "77. Revenue Courts and suits cognizable by them. (1) When a Revenue officer is exercising jurisdiction with respect to any such suit as is described in sub section (3), or with respect to an appeal or other proceeding arising out of any such suit, he shall be called a Revenue Court. (2) . . . . . . . . (3) The following suits shall be instituted in, and heard and determined by, Revenue Courts, and no other Court shall take cognizance of any dispute or matter with respect to which any such suit might be instituted: Provided that (1) . . . . . . . . (2) . . . . . . . . FIRST GROUP . . SECOND GROUP . . 99 (e) suit by a landlord to eject a tenant;" A The controversy with which we are concerned in this appeal is a type of suits indicated in second group under clause (e), namely, suits by a landlord to eject a tenant The question of res judicata was analysed in the background of land acquisition proceedings by this Court in Raj Lakshmi Dasi and others vs Banamali Sen and others, There this Court observed that the right to receive compensation for property acquired in land acquisition proceedings as between rival claimants depended on the title to the property acquired and the dispute as to title was raised by the parties and had to be decided by the Land Acquisition Judge after contest, so this decision as to title operates as res judicata in a subsequent suit between the same parties on the question of title The binding force of a judgment delivered under the Land Acquisition Act depended on general principles of law and not on section 11 of the Civil Procedure Code, and the decision of a Land Acquisition Judge would operate as res judicata even though he was not competent to try the subsequent suit. It has to be emphasised, however that the right to compensation depended upon the title, but here in the instant case the right to ejectment existed only if the relationship of landlord and tenant existed. The Revenue Court did not have jurisdiction whether the claimant was the landlord to be entitled to eject the tenant. Our attention was drawn by Sree Harbans Lal, learned counsel appearing for the appellants to section 98 of the Act, as to the power of the Revenue Court to refer to the Civil Court a decision by the Revenue Court if it thought proper and also to section 99, where there is power to refer to High Court question as to jurisdiction. These provisions in our opinion, do not in any way affect the question whether the decision of the Revenue Court under the Revenue Act can operate as res judicata in certain cases like the present. The limits of the jurisdiction would be apparent by the fact that in all suits by a landlord to reject a tenant, do not encompass suits to decide whether a person is a tenant or not or whether the plaintiff is a landlord or not. The question was answered by this Court in Om Prakash Gupta vs Rattan Singh and another, l 19641 1 S.C.R. 259 where Sinha, C.J. dealing with the Delhi Rent Control Act observed at pages 264 and 265 as follows: "The most important question that arises for determination 100 in this case is whether or not the Rent Control authorities had jurisdiction in the matter in controversy in this case ordinarily it is for the Civil Courts to determine whether and, if so, what jural relationship exists between the litigating parties But the Act has been enacted to provide for the control of rents and evictions of tenants, avowedly for their benefit and protection. The Act postulates the relationship of landlord and tenant which must be a pre existing relationship. The Act is directed to control some of the terms and incidents of that relationship. Hence, there is no express provision in the Act empowering the Controller, or the Tribunal, to determine whether or not there is a relationship of landlord and tenant. In most cases such a question would not arise for determination by the authorities under the Act. A landlord must be very ill advised to start proceedings under the Act, if there is no such relationship of landlord and tenant. If a person in possession of the premises is not a tenant, the owner of the premises would be entitled to institute a suit for ejectment in the Civil Courts, untrammelled by the provisions of the Act. It is only when he happens to be the tenant of premises in an urban area that the provisions of the Act are attracted." (Emphasis supplied. ) In Shri Raja Durga Singh of Solan vs Tholu, [19631 2 S.C.R. 693, this Court had occasion to consider the question of res judicata in the background of the jurisdiction of the Court. That was a case under section 77 of the Punjab Tenancy Act. In that case the appellant had filed a suit before the Civil Court for the ejectment of the respondent therein on the ground that they were licensees. The respondents claimed that they were occupancy tenants and contended that under section 77 of the Punjab Tenancy Act, 1887, the suit was triable by a revenue court only and not by the civil court. The trial court and the first appellate court decreed the suit holding that the respondents were not tenants. On second appeal the Judicial Commissioner held that the respondents were occupancy tenants and that the civil court had no jurisdiction to entertain the suit. It was held by this Court that the civil court had jurisdiction to entertain the suit and section 77 of the Punjab Tenancy Act was applicable "only to suits between landlord and tenants where there was no dispute that the person cultivating the land was a tenant". But where the status of the defendant as a tenant was not admitted by the landlord, section 77 did not bar a suit in a civil court. This Court held that it would, therefore, be reasonable to infer 101 that the legislature barred only those suits which form the cognizance of a civil court where there was no dispute between the parties that a person cultivating land or who was in possession of land was a tenant. This is precisely what has been held in the two decisions of the Lahore High Court where there was reference at pages 698 699 of the report. In the first of these two cases. Tek Chand J. had observed: "It is obvious that the bar under clause (4) is applicable to those cases only in which the relationship of landlord and tenant is admitted and the object of the suit is to determine the nature of the tenancy i.e. whether the status of the tenant falls under section 5, 6, 7 or 8 of the Act. In that case the suit was instituted by someone claiming to succeed to the tenancy of certain land on the death of the occupancy tenant. The learned Judge observed: 'In a suit like the one before us the point for decision is not the nature of the tenancy, but whether the defendant is related to the deceased tenant and if so whether their common ancestor had occupied the land. If these facts are established, the claimant, ipso facto succeeds to the occupancy tenancy. But if they are found against him, he is not a tenant at all. ' As these facts were not established the High Court held that the landlord was entitled to sue the defendant who had entered on the land asserting a claim to be a collateral of the deceased tenant but who failed to substantiate his claim. This view was affirmed by a Full Bench consisting of five Judges in the other Lahore case. In Daya Ram vs Jagir Singh, A.I.R 1956 H.P. 61 the same Judicial Commissioner who decided the appeal before us has expressed the view that where in a suit for ejectment the existence of the relationship of landlord and tenant is not admitted by the parties the Civil Court had jurisdiction to try the suit and that such a suit did not fall under section 77(3) of the Act. In Magiti Sasamal vs Pandab Bissoi, [1962] 3 S.C.R. 673 this Court was considering the provisions of section 17(1) of the Orissa Tenants Protection Act, 1948 (3 of 1948). The provisions of that section run thus: 'Any dispute between the tenant and the landlord as re 102 gards, (a) tenant 's possession of the land on the 1st day of September, 1947 and his right to the benefits under this Act, or (b) misuse of the land by tenant, or (c) failure of the tenant to cultivate the land properly, or (d) failure of the tenant to deliver to the landlord the rent accrued due within two months from the date on which it becomes pay able, or (e) the quantity of the produce payable to the landlord as rent, shall be decided by the Collector on the application of either of the parties. ' lt was contended in that case on behalf of the respondents who claimed to be tenants that suit for permanent injunction instituted by the appellant landlord was barred by the provisions of section 7(1). Dealing with this contention this Court observed as follows. 'In other words, section 7(1) postulates the relationship of tenant and landlord between the parties and proceeds to provide for the exclusive jurisdiction of the Collector to try the five categories of disputes that may arise between the landlord and the tenant. The disputes which are the subject matter of section 7(1) must be in regard to the five categories. That is the plain and obvious construction of the words 'any dispute as regards '. On this construction it would be unreasonable to hold that a dispute about the status of the tenant also falls within the purview of the said section. The scheme of section 7(1) is unambiguous and clear. It refers to the tenant and landlord as such and it contemplates disputes of the specified character arising between them. Therefore, in our opinion, even on a liberal construction of section 7(1) it would be difficult to uphold the argument that a dispute as regards the existence of relationship of landlord and tenant falls to be determined by the Collector under section 7(1). ' " As regards the said observations, in so far as the essential facts are concerned, precisely the same is the position in the instant appeal. Here the respondent is claiming to be a mortgagee in possession and not a tenant in possession. In Magiti Sasamal vs Pandab Bissoi, , the appellant had filed in the Civil Court a suit for permanent injunction restraining the respondents from entering the lands in suit on the allegation that the lands belonged to him and were in his cultivatory possession for many years and the respondents had 103 no right or title and had never cultivated them. The respondents contended that they were tenants of portions of the said lands and were in cultivating possession of the same as tenants. The question which arose for decision was whether having regard to the provisions of section 7(1) of the Orissa Tenants Protection Act, 1948, the Civil Court had jurisdiction to entertain the suit which involved a dispute as to the relationship of landlord and tenant between the parties. It was held that even on a liberal construction of section 7(1) of the Act, it cannot be held that disputes as regards the existence of the relationship of landlord and tenant fall to be determined by the Collector under that section. Disputes which are entrusted to the Collector under section 7(1) are the simple disputes specified therein in the five categories and do not include a serious dispute as to the relationship between the parties as landlord and tenant. It is well settled that ouster of jurisdiction of civil courts should not be inferred easily. It must be clearly provided for and established. This question was again viewed in the background of the in Lal Chand (dead) by Lrs. and others vs Radha Kishan, [1977] 2 S.C.R. 522, where this Court reiterated that section 11 was not exhaustive and the principle which motivates that section could be extended to cases which do not fall strictly within the letter of the law. This Court further reiterated that the principle of res judicata was conceived in the larger public interest which required that all litigation must, sooner than later, come to an end. This Court in the State of Tamil Nadu vs Ramalinga Samigal Madam, A.I.R. 1986 S.C.794 has analysed the position in paragraph 8 as follows: "The principles bearing on the question as to when exclusion of the Civil Court 's jurisdiction can be inferred have been indicated in several judicial pronouncements but we need refer to only two decisions. In Secretary of State vs Mask and company, A.I.R. 1940 P.C. lOS at p. 110 the Privy Council at page 236 of the Report has observed thus: 'It is settled law that the exclusion of the jurisdiction of the Civil Courts is not to be readily inferred but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, the Civil Courts have jurisdiction to examine into cases where the provi 104 sions of the Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. In Dhulabhai vs State of Madhya Pradesh, [ ; Hidayatullah, C.J., speaking for the Court, on the analysis of the various decisions cited before the Court ex pressing diverse views, called out as many as 7 propositions; out of them the first two which are material for our purposes are these: '(1) Where the statute gives a finality to the orders of the special tribunal the civil Court 's jurisdiction must be held to be excluded if there is adequate remedy to do what the civil Courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. (2) Where there is an express bar of the jurisdiction of the Court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the Civil Court. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in civil Courts are prescribed by the said statute or not '. Applying the aforesaid principles, it appears to us that if the dispute was as to the nature of the relationship of landlord and tenant 105 between the parties, the Revenue Court under the Punjab Tenancy A Act had no jurisdiction when there was admitted position, the relationship of landlord and tenant was accepted, the remedies and rights of the parties should be worked out under the scheme of the Act. A salutary and simple test to apply in determining whether the previous decision operated as res judicata or on principles analogous thereto is to find out whether the first court, here the Revenue Court could go into the question whether the respondent was a tenant in possession or mortgagee in possession. It is clear in view of langugage mentiond before that it could not. If that be so there was no res judicata. The subsequent civil suit was not barred by res judicata. In that view of the matter, we are of the opinion that the High Court of Punjab and Haryana was right in holding that there was no res judicata so far as the second suit based on the assertion of the title of the respondent was concerned. The appeals must, therefore, fail and are accordingly dismissed with costs. D N.P.V. Appeals dismissed.

A suit was filed by the appellants in the Court of the Assistant Collector seeking ejectment of the respondent tenant from his lands, under section 77(3) proviso 2(e) of the Punjab Tenancy Act, 1887 on the ground that he had defaulted in the payment of rent, and it was decreed. In execution of the decree, the respondent was ejected from the suit land. No appeal was filed from the said decree but the respondent filed a suit in the Civil Court against the appellants alleging that he was in fact a mortgagee in possession of the suit land and not a tenant and that the decree of ejectment passed by the Revenue Court was without jurisdiction and, therefore, a nullity, and claimed restoration of the possession of the suit land from which he had been wrongly ousted by the Revenue Court. The suit was dismissed by the Subordinate Judge holding that the claim of the respondent to be a mortgagee in possession of the suit land was wrong and that the order of the Revenue Court was perfectly in order and within that court 's jurisdictional competence and that it was of a binding nature on the respondent and was not open to challenge in subsequent proceedings. The appellant asserted that the claim by the respondent in the subsequent suit was barred by the principles of res judicata. The suit was dismissed. In appeal, the Additional District Judge reversed the findings of the trial court and decreed the suit of the respondent. The appellants filed regular second appeals before the High Court. 94 A Single Judge of the High Court was of the view that, in view of the conflicting judgments on the points for determination in the case, the matter required to be referred to a larger bench. The Full Bench, by a majority view, held that the decision of the Revenue Court under section 77 of the Punjab Tenancy Act upon the relationship of landlord and tenant between the parties would not operate as res judicata and it would be open to challenge in a subsequent suit or in other collateral proceedings between the parties, and remitted the matter back to the Single Judge for disposal in accordance with the above decision. The question for consideration in the appeals by Special Leave before this Court was: as to how far an order of eviction of a person by the Revenue Court under section 77(3) of the Punjab Tenancy Act, 1887 operated as res judicata for a title suit filed by a person claiming to be a mortgagee and not a tenant of the alleged landlord. Dismissing the appeals by special leave, this Court, ^ HELD: 1. The High Court was right in holding that there was no res judicata so far as the second suit based on the assertion of the title of the respondent was concerned. [105C D] 2.1 The overall scheme of the Act is to provide speedy remedies with regard to disputes between the landlords and tenants and also under what circumstances that relationship came to an end. Sections 98 and 99 do not in any way affect the question whether the decision of the Revenue Court under the Revenue Act can operate as res judicata in certain cases. The limits of the jurisdiction would be apparent by the fact that all suits by a landlord to eject a tenant do not encompass suits to decide whether a person was a tenant or not or whether the plaintiff was a landlord or not. [98C; 99 F G] 2.2 ouster of jurisdiction of Civil Courts should not be inferred easily. It must be clearly provided for and established. If the dispute was as to the nature of the relationship of landlord and tenant between the parties, the Revenue Court under the Punjab Tenancy Act had no jurisdiction; when there was admitted position, the relationship of landlord and tenant was accepted, the remedies and rights of the parties should be worked out under the scheme of the Act. [103C D] 2.3 A salutory and simple test to apply in determining whether the previous decision operated as res judicata or on principles analogous thereto was to find out whether the first court could go into the question 95 whether the respondent was a tenant in possession or mortgagee in A possession. In view of the language of section 77 it is clear that it could not and, therefore, there was no res judicata. The subsequent civil suit was. therefore, not barred by res judicata. [105B C] Raj Lakshmi Dasi and others vs Banamali Sen and others, ; Om Prakash Gupta vs Rattan Singh and another, ; Shri Raja Durga Singh of Solan vs Tholu; , ; Magiti Sasamal vs Pandab Bissoi, ; Lal Chand (dead) by Lrs. and others vs Radha Kishan, [1977] 2 SCR 522 and State of Tamil Nadu vs Ramalinga Samigal Madam; , , referred to.

Appeal No. 220/ 1963. Appeal by special leave from the judgment and order dated January 9, 1961 of the Kerala High Court in I.T.R. Case No. 17 of 1959. K. N. Rajagopal Sastri and R. N. Sachthey, for the ap pellant. The respondent did not appear. April 1, 1964. The Judgment of the Court was delivered by SUBBA RAO, J. This appeal by special leave preferred against the judgment of the High Court of Kerala at Ernakulam raises the question of the interpretation of section 7(1) of the Indian Income tax Act, 1922 (Act No. XI of 1922), hereinafter called the Act. The respondent, L. W. Russel, is an employee of the English and Scottish Joint Co operative Wholesale Society Ltd., Kozhikode, hereinafter called the Society, which was incorporated in England. The Society established a superan nuation scheme for the benefit of the male European members of the Society 's staff employed in India, Ceylon and Africa by means of deferred annuities. The terms of such benefits were incorporated in a trust deed dated July 27, 1934. Every European employee of the Society shall become a member of that scheme as a condition of employment. Under the term of the scheme the trustee has to effect a policy of insurance for the purpose of ensuring an annuity to every member of the Society on his attaining the age of superannuation or on the happening of a specified contin gency. The Society contributes 1/3 of the premium payable by such employee. During the year 1956 57 the Society con tributed Rs. 3,333/ towards the premium payable by the respondent. The Income tax Officer, Kozhikode Circle, in cluded the said amount in the taxable income of the respon dent for the year 1956 57 under section 7(1), Explanation 1 Sub cl. (v) of the Act. The appeal preferred by the respondent against 571 the said inclusion to the Appellate Assistant Commissioner of Income tax, Kozhikode, was dismissed. The further appeal preferred to the Income tax Appellate Tribunal received the same fate. The assessee thereupon filed an application under section 66(1) of the Act to the Income tax Appellate Tribunal for stating a case to the High Court. By its order dated December 1, 1958, the Tribunal submitted a statement of case referring the following three questions of law to the High Court of Kerala at Ernakulam: (1) Whether the contributions paid by the employer to the assessee under the terms of a trust deed in respect of a contract for a deferred annuity on the life of the assessee is a 'perquisite ' as contemplated by section 7(1) of the Indian Income tax Act? (2) Whether the said contributions were allowed to or due to the applicant by or from the employer in the accounting year? (3) Whether the deferred annuity aforesaid is an annuity hit by section 7(1) and para. (v) of Explanation 1 thereto? On the first question the High Court held that the employer 's contribution under the terms of the trust deed was not a perquisite as contemplated by section 7(1) of the Act. On the second question it came to the conclusion that the employer 's contributions were not allowed to or due to the employee in the accounting year. On the third question it expressed the opinion that the Legislature not having used the word 'deferred" with annuity in section 7(1) and the statute being a taxing one, the deferred annuity would not be hit by para. (v) of Explanation 1 to section 7(1) of the Act. The Commissioner of Income tax has preferred the present appeal to this Court questioning the correctness of the said answers. The three questions formulated for the High Court 's opinion are interdependent and the answers to them turn upon the true interpretation of the relevant part of section 7(1) of the Act. Mr. Rajagopala Sastri, learned counsel for the appellant, contends that the amount contributed by the Society under the scheme towards the insurance premium payable by the trustees for arranging a deferred annuity on the respondent 's superannuation is a perquisite within the meaning of section 7(1) of the Act and that the fact that the respondent may not have the benefit of the contributions on the happening of certain contingencies will not make the said contributions any the less a perquisite. The employer 's share of the contributions to the fund earmarked for paying premiums of the insurance policy, the argument proceeds, vests in the respondent as soon as 572 it is paid to the trustee and the happening of a contingency only 'operates as a defeasance of the vested right. The respondent is ex parte and, therefore, the Court has not the benefit of the exposition of the contrary view. Before we attempt to construe the scope of section 7(1) of the Act it will be convenient at the outset to notice the pro visions of the scheme, for the scope of the respondent 's right in the amounts representing the employer 's contributions thereunder depends upon it. The trust deed and the rules dated July 27, 1934, embody the superannuation scheme. The scheme is described as the English and Scottish Joint Co operative Wholesale Society Limited Overseas European Employees ' Superannuation Scheme, hereinafter called the Scheme. It is established for the benefit of the male European members 'of the Society 's staff employed in India, Ceylon and Africa by means of deferred annuities. The Society itself is appointed thereunder as the first trustee. The trustees shall act as agents for and on behalf of the Society and the members respectively; they shall effect or cause to be effected such policy or policies as may be necessary to carry out the scheme and shall collect and arrange for the payment of the moneys payable under such policy or policies and shall hold such moneys as trustees for and on behalf of the person or persons entitled thereto under the rules of the Scheme. The object of the Scheme is to provide for pensions by means of deferred annuities for the members upon retirement from employment on attaining certain age under the conditions mentioned therein, namely, every European employee of the Society shall be required as a condition of employment to apply to become a member of the Scheme from the date of his engagement by the Society and no member shall be entitled to relinquish his membership except on the termination of his employment with Society; the pension payable to a member shall be provided by means of a policy securing a deferred annuity upon the life of such member to be effected by the Trustees as agents for and on behalf of the Society and the members respectively with the Co operative Insurance Society Limited securing the payment to the Trustees of an annuity equivalent to the pension to which such member shall be entitled under the Scheme and the Rules; the insurers shall agree that the Trustees shall be entitled to surrender such deferred annuity and that, on such deferred annuity being so surrendered, the insurers will pay to the Trustees the total amount of the premiums paid in respect thereof together with compound interest thereon; all moneys received by the Trustees from the insurers shall be held by them as Trustees for and 'on behalf of the person or persons entitled thereto under the Rules of the Scheme; any policy or policies issued by the insurers in connection with the 573 Scheme shall be deposited with the Trustees; the Society shall contribute one third of the premium from time to time payable in respect of the policy securing the deferred annuity in respect of each member as thereinbefore provided and the member shall contribute the remaining two thirds , the age at which a member shall normally retire from the service of the Society shall be the age of 55 years and on retirement at such age a member shall be entitled to receive a pension of the amount specified in Rule 6; a member may also, after following the prescribed procedure, commute the pension to which he is entitled for a payment in cash in accordance with the fourth column of the Table in the Appendix annexed to the Rules; if a member shall leave or be dismissed from the service of the Society for any reason whatsoever or shall die while in the service of the Society there shall be paid to him or his legal personal representatives the total amount of the portions of the premiums paid by such member and if he shall die whilst in the service of the Society there shall be paid to him or his legal personal representatives the total amount of the portions of the premiums paid by such member and if he shall die whilst in the service of the Society or shall leave or be dismissed from the service of the Society on account of permanent breakdown in health (as to the bona fides of which the Trustees shall be satisfied,) such further proportion (if any) of the total amount of the portions of the premiums paid by the Society in respect of that member shall be payable in accordance with Table C in the Appendix to the Rules; if the total amount of the portions of the premiums in respect of such member paid by the Society together with interest thereon as aforesaid shall not be paid by the Trustees to him or his legal personal representatives under sub section (1) of r. 15 then such proportion or the whole, as the case may be, of the Society 's portion of such premiums and interest thereon as aforesaid as shall not be paid by the Trustees to such member or his legal personal representatives as aforesaid shall be paid by the Trustees to the Society; the rules may be altered, amended or rescinded and new rules may be made in accordance with the provisions of the Trust Deed but not otherwise. We have given the relevant part of the Scheme and the Rules. The gist of the Scheme may be stated thus: The object of the Scheme is to provide for pensions to its employees. It is achieved by creating a trust. The Trustees appointed thereunder are the agents of the employer as well as of the employees and hold the moneys received from the employer, the employee and the insurer in trust for and on behalf of the person or persons entitled thereto under the rules of the Scheme. The Trustees are enjoined to take out policies of insurance securing a deferred annuity upon the 574 life of each member, and funds are provided by contributions from the employer as well as from the employees. The Trus tees realise the annuities and pay the pensions to the employees. Under certain contingencies mentioned above, an employee would be entitled to the pension only after super annuation. If the employee leave the service of the Society or is dismissed from service or dies in the service of the Society, he will be entitled only to get back the total amount of the portion of the premium paid by him, though the trustees in their discretion under certain circumstances may give him a proportion of the premiums paid by the Society. The entire amount representing the contributions made by the Society or part thereof, as the case may be, will then have to be paid by the Trustees to the Society. Under the scheme the employee has not acquired any vested right in the con tributions made by the Society. Such a right vests in him only when he attains the age of superannuation. Till that date that amount vests in the Trustees to be administered in accordance with the rules , that is to say, in case the employee ceases to be a member of the Society by death or otherwise, the amount contributed by the employer with interest thereon, subject to the discretionary power exercisable by the trustees, become payable to the Society. If he reaches the age of superannuation, the said contributions irrevocably become fixed as part of the funds yielding the pension. To put it in other words, till a member attains the age of superannuation the employer 's share of the contributions towards the premiums does not vest in the employee. At best he has a contingent right therein. In 'one contingency the said amount becomes payable to the employer and in another contingency, to the employee. Now let us look at the provisions of section 7(1) of the Act in order to ascertain whether such a contingent right is hit by the said provisions. The material part of the section reads: Section 7(1) The tax shall be payable by an assessee under the head "salaries" in respect of any salary or wages, any annuity, pension or gratuity, and any fees, commissions, perquisites or profits in lieu of, 'or in addition to, any salary or wages, which are allowed to him by or are due to him, whether paid or not, from, or are paid by or on behalf of. . . a company. . . . Explanation I For the purpose of this section perquisite includes (v) any sum payable by the employer, whether directly or through a fund to which the pro. visions of Chapters IX A and IX B do not 575 apply, to effect an assurance on the life of the assessee or in respect 'of a contract of annuity on the life of the assessees. This section imposes a tax on the remuneration of an employee. It presupposes the existence of the relationship if employer and employee. The present case is sought to be brought under the head "perquisites in lieu of, or in addition to, any salary or wages, which are allowed to him by or are due to him, whether paid or not, from, or are paid by or on behalf of a company". The expression "perquisites" is defined in the Oxford Dictionary as "casual emoluments. fee or profit attached to an office or position in addition to salary or wages". Explanation 1 to section 7(1) of the Act gives an inclusive definition. Clause (v) thereof includes within the meaning of "perquisites" any sum payable by the employer, whether directly or through a fund to which the provisions of Chs. IX A and IX B do not apply, to effect an assurance on the life of the assessee or in respect of a contract for an annuity on the life of the assessee. A combined reading of the substantive part of section 7(1) and cl. (v) of Expl. 1 thereto makes it clear that if a sum of money is allowed to the employee by or is due to him from or is paid to enable the latter to effect an insurance on his life, the said sum would be a perquisite within the meaning of section 7(1) of the Act and, therefore, would be eligible to tax. But before such sum becomes so exigible, it shall either be paid to the employee or allowed to him by or due to him from the employer. So far as the expression "paid" is concerned, there is no difficulty, for it takes in every receipt by the employee from the employer whether it was due to him or not. The expression "due" followed by the qualifying clause "whether paid or not" shows that there shall be an obligation on the part of the employer to pay that amount and a right on the employee to claim the same. The expression "allowed", it is said, is of a wider connota tion and any credit made in the employer 's account is cover ed thereby. The word "allowed" was introduced in the sec tion by the Finance Act of 1955. The said expression in the legal terminology is equivalent to "fixed, taken into account, set apart, granted". It takes in perquisites given in cash or in kind or in money or money 's worth and also amenities which are not convertible into money. It implies that a eight is conferred on the employee in respect of those perquisites. One cannot be said to allow a perquisite to an employee if the employee has no right to the same. It cannot apply to contingent payments to which the employee has no right till the contingency occurs. In short, the employee must have a vested right therein. If that be the interpretation of section 7(1) of the Act, it is. not possible to hold that the amounts paid by the Society 576 to the Trustees to be administered by them in accordance with the rules framed under the Scheme are perquisites allowed to the respondent or due to him. Till he reaches the age of superannuation, the amounts vest in the Trustees and the beneficiary under the trust can be ascertained only on the happening of one or other of the contingencies provided for under the trust deed. On the happening of one contingency, the employer becomes the beneficiary, and on the happening of another contingency, the employee becomes the beneficiary. Learned counsel for the appellant strongly relied upon the decision of the King 's Bench Division in Smyth vs Stretton(1). There, one Stretton, one of the Assistant Masters of Dulwich College, was assessed to income tax in the sum of pouns 385 in respect of his emoluments as Assistant Master received from the Governors of Dulwich College for the year ended the 5th day of April, 1901. He objected to the assessment on the ground that it included pound 35 not liable to taxation, being amount placed to his credit by the Governors under the Provident Fund Scheme for the year 1900. Channell, J., with some hesitation, came to the conclusion that the said sum was taxable. That case was dealing with a scheme for the establishment of provident fund for the benefit of the Assistant Masters on the permanent staff of the Dulwich College. Under para. 1 of the scheme the salaries of Assistant Masters were increased. Clause (a) of para. 1 of the scheme provided that Assistant Masters having not less than five years, but less than fifteen years ' service, would be allowed an increase of 5 per cent, in their salaries; under cl. (b) thereof, Assistant Masters having not less than 15 years ' of service and over, would get an increase of 7 1/2 per cent. in their salaries; under cl. (c) thereof, a further addition in their salaries, equal in amount to the above sums, should be granted from the same date to the Assistant Masters alluded to in (a) and (b), such addition being, however, subject to the conditions provided by para. Paragraph 5 read: "That Assistant Masters having less than ten years ' service who may resign their appointments, or from any other cause than ill health cease to belong to the College, shall be entitled to receive the total increase sanctioned by (a) and the accu mulations thereof, but shall not receive the additional increase sanctioned by (c), or the accumulations thereof. In the event of any such Assistant Master retiring from ill health the Governors, in addition to the increase sanctioned by (a), may grant him the further 5 per cent. sanctioned by (c), and the accumulations thereof. In the event of death of any such Assistant Master whilst in (1) , 46. 577 the service of the College, the 5 percent. due by (c) as well as under (a), with the accumulations thereof, shall be paid to his legal representatives". It was contended that the amount payable under cl. (c) of para. I was a contingent one without any vested character and, therefore, could not be described as income in any way. The learned Judge construed the provisions of the scheme and rejected the contention. The main reason for his conclusion is stated thus: "The result seems to me to be that I must take that sum as a sum which really has been added to the salary and is taxable, and it is not the less added to the salary because there has been a binding obligation created between the Assistant Masters and Governors of the Schools that they should apply it in a particular way". No doubt it is possible for another court to come to a different conclusion on the construction of the provisions of the scheme; but the learned Judge came to the conclusion that cl. (c) of para. 1 of the scheme provided for an additional salary to the Assistant Masters. Indeed, the Court of Appeal in Edwards (H. M. Inspector of Taxes) vs Roberts(1) construed a similar scheme and came to the contrary conclusion and explained the earlier decision on the basis we have indicated. There, the respondent was employed by a company under a service agreement dated 'August 21, 1921, which provided inter alia, that, in addition to an annual salary, he should have an interest in a "conditional fund", which was to be created by the company by the payment after the end of each financial year of a sum out of its profits to the trustees of the fund to be invested by them in the purchase of the company 's shares or debenture stock. Subject to possible forfeiture of his interest in certain events, the respondent was entitled to receive the income produced by the fund at the expiration of each financial year, and to receive part of the capital of the fund, (or, at the trustees ' option, the investments representing the same) at the expiration of five financial years and of each succeeding year, and, on death whilst in the company 's service or on the termination of his employ ment by the company, to receive the whole amount then standing to the credit of the capital amount of the fund (or the actual investments). The respondent resigned from the service of the company in September, 1927, and at that date the trustees of the fund transferred to him the shares which they had purchased out of the payments made to them by the company in the years 1922 to 1927. He was assessed to income tax on the amount of the current market value of the (1) , 638, 640. LP(D)ISCI 17 578 shares at the date of transfer. The assessee contended that immediately a sum was paid by the company to the trustee& of the fund he became invested with a beneficial interest in the payment which formed part 'of his emoluments for the year in which it was made, and for no other year, and that, accordingly, the amount of the assessment for the year 1927 28 ought not, in any event, to exceed the aggregate of the sums paid by the company to the trustees, the difference between the amount and the value of the investments at the date of transfer representing a capital appreciation not liable to tax for any year. The Court of Appeal rejected the contention. Lord Hanworth, M. R., in rejecting the contention. observed be said to have accrued to this employee a vested interest in these successive sums placed to his credit, but only that he had a chance of being paid a sum at the end of six years if all went well. That chance has now supervened, and he has got it by reason of the fact of his employment, or by reason of his exercising an employment of profit within Schedule E.". Maugham. L. J., said much to the same effect thus: "The true nature of the agreement was that lie was to be entitled in the events, and only in the events mentioned in Clause 8 of the agreement, to the investments made by the Company out of the net profits of the Company as provided in Clause 6.". The decision of Channel], J., in Smyth vs Stretton(1) was strongly relied upon before the appellate court. But the, learned Judges distinguished that case on the round that under the scheme which was the subject matter Of that deci sion the sums taxed were really additions to the salary of the Assistant Master and that. in any view, that decision should be confined to the facts of that case. The principle laid down by the Court of Appeal, namely, that unless a vested interest in the sum accrues to an employee it is not taxable. equally applies to the present case. As we have pointed out earlier, no interest in the sum contributed by the employer under the scheme vested in the employee. as it was only a contingent interest depending upon his reaching the age of superannuation. It is not a perquisite allowed to him by the employer or an amount due to him from the employer within the meaning of section 7(1) of the Act. We, therefore, hold that the High Court has given correct answers to the questions of law submitted to it by the Income tax Appellate Tribunal. In the result, the appeal fails and is dismissed. Appeal dismissed. (1)(1904) 46.

The respondent is an employee of the English and Scottish Joint Co operative Wholesale Society Ltd. incorporated in England. The Society established a superannuation scheme for the benefit of the male European members of its staff employed in India by means of deferred annuities. Under the terms of the scheme, the trustee has to effect a policy of insurance for the purpose of ensuring an annuity to every member of the ,Society on his attaining the age of superannuation or on the happening of a specific contingency. The Society contributed ,one third of the premium payable by each employee. During the year 1956 57, the Society contributed Rs. 3333/ towards the premium payable by the respondent, an employee of the Society. The Income tax Officer included the said amount in the taxable income of the respondent for the year 1956 57 under section 7(1), Explanation 1, sub cl. (v) of the Act. The appeals of the respondent were dismissed both by the Appellate Assistant Commissioner of Income tax and the Income tax Appellate 'Tribunal. The Tribunal referred to the High Court the following three questions of law: (1) Whether the contribution paid by the employer to the assessee under the terms of a trust deed in respect of a contract for a deferred annuity on the life of the assessee is a perquisite as contemplated by section 7(1) of the Income tax Act? (2) Whether the said contributions were allowed to, or due to the applicant by or from the employer in the accounting year? (3) Whether the deferred annuity aforesaid is annuity hit by section 7(1) and para (v) of Explanation 1 thereto. The High Court held that the employer 's contribution under the terms of the trust deed was not a perquisite as con templated by section 7(1). The employer 's contributions were not allowed to or due to the employee in the accounting year. The legislature not having used the word "deferred" with annuity in section 7(1) and the statute being a taxing one, the deferred annuity would not hit para (v) of Explanation 1 to section 7 (1) of the Act. Against the decision of High Court, the appellant came to this Court by special leave. Dismissing the appeal, 570 Held: The answers to the questions of law as given by the High Court were correct. Unless a vested interest in the sum accrues to an employee, it is not taxable. In the present case. no interest in the sum contributed by the employer under the scheme vested in the employee, as it was only a contingent interest depending upon his reaching the age of superannuation. it is not a perquisite allowed to him by the employer or an amount, due to him from the employer within the meaning of section 7(1) of the Act. A perquisite is only that amount of money which is allowed to the employee by or is due to him from the employer or is paid to him to effect an insurance on his life. Smyth vs Stretton, , and Edwards (H. M., Inspector of Taxes) vs Roberts, , referred to.

Appeal No, 110 of 1960. Appeal by special leave from the judgment and decree dated April 13, 1956, of the former Nagpur High Court in F.A. No. 99 of 1947. Naunit lal, for the appellants. B. A. Masodkar, B. D. Najbile and Ganpat Rai, for the respondents. September 12. The judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave raises a short question about the construction of section 149 (2) of the C. P. Land Revenue Act, 1917 (No II of 1917) (hereinafter called the Act). The validity of a revenue sale of their properties held on February 27, 1941 under section 128(f) of the Act was challenged by the appellants by their suit 30 . filed in the Court of the Additional judge, Nagpur on November 12, 1946. Ganpatrao Vishwanathji Deshmukh who had purchased the properties at the said auction sale was impleaded as defendant No. 1 to the said suit. During the pendency of the litigation, the said Ganpatrao has died and his heirs have been brought on the record. They will be referred to as respondent No. 1 in the course of this judgment. The appellants challenged the impugned sale on five different grounds. They alleged that the sale was without jurisdiction; that as the final bid was not accepted by the Dy. Commissioner, it was invalid; that as the sale was brought about fraudulently by respondent No. 1 in collusion with the Revenue Clerk, it was invalid; that as the Commissioner was not competent to confirm the sale on November 13 1945, it was invalid; and that the sale could not be held validly for the recovery of Rs. 1,354/9/ which was shown in the proclamation of sale as the arrear for which the property was put to sale. The trial court rejected all the contentions raised by the appellants in impeaching the validity of the sale and so, the relief claimed by the appellants against respondent No. 1 by way of injunction restraining him from recovering possession of the property and disturbing the appellants ' possession thereof was rejected. The appellants then preferred an appeal in the Nagpur High Court. The High Court has confirmed the findings of the trial court and accordingly, the appeal has been dismissed. It is against this decree that the appellants have come to this Court by special leave; and the only point which has been raised on their behalf by Mr. Naunit Lal is that the view taken by the courts below that the impugned sale could not be effectively challenged by the appellants under s.149 (2) is not justified on a fair and reasonable construction of the said provisions. The material facts leading to this point are very few, and they are not in dispute. The appellants are Lambardars of Mahal No. 2 of Mouza Gujarkhedi, 31 Tehsil Saoner, District Nagpur, and they held therein an undivided interest of As. /11/ . On or about October 4, 1940, they were found to be in arrears of land revenue to the extent of Rs. 730/13/ in respect of the suspended Rabi kist of 1938 39 and the Rabi kist of 1939 40. The Tehsildar of Saoner .made a report on October 4, 1940 to the Dy. Commissioner that the said arrears were due from the appellants and asked for sanction to sell by auction the property in suit. 'Along with this report, a draft of the sale proclamation containing the relevant details was also submitted for the signature of the S.D.O. in case the Dy. Commissioner sanctioned the sale. The S.D.O. forwarded the said report to the Dy. Commissioner who accorded sanction to the proposal of the Tehsildar on December 17, 1940. Thereafter, on December 23, 1940. the S.D.O. signed the said proclamation and on getting the said documents back, the Tehsildar ordered on January 7, 1941 that the sale proclamation should be published and that the sale should be held on February 26, 1941. On that date, the sale was adjourned to February 27, 1941 for want of adequate bids. On the next day the sale was held and the property was sold to respondent No. 1 for Rs. 600/ . Ultimately, the said sale was confirmed. It is common ground that though at the relevant time, arrears due from the appellants amounted only to Rs. 730/13/ , in the Parchanama the said amount was shown as Rs. 1,354/9/ and the property in fact was sold to recover the said amount of arrears under section 128(f) of the Act. The appellants ' contention is that the arrear, Rs. 1,354/9/ , for which his property has been sold under section 128(f) was not due; what was due was the lesser amount of, Rs. 730/13/ and so, the sale in question is invalid under section 149 (2) of the Act. In dealing with this point, it is necessary to refer to the relevant provisions of the Act. Chapter X of the Act deals with the collection of land revenue, and it consists of sections 122 to 160. Section 124 32 confers power on the State Government to regulate payment of sums payable under the Act and provides for the number and amount of the instalments, and the time, place and manner of payment of any sum payable under a settlement or sub settlement, or otherwise under an assessment made under this Act. Sub section (2) of section 124 requires that unless the State Government otherwise directs, all such payments shall be made as prescribed under sub section A notice of demand can be issued by Tehsildar or Naib Tehsildar under section 127 and it may be served on any defaulter before the issue of any process under section 128 for the recovery of an arrear. Section 128 provides for the process for recovery of an arrear and it prescribes that an arrear payable to Government may be recovered, inter alia,. (f) by selling such estate, mahal or land, or the share or land of any co sharer who has not paid the portion of the land revenue which, as between him and the other co sharers, is payable by him. Section 131 prescribes the procedure for attachment and sale of movables and attachment of immovable property. Then section 132 provides for holding enquiry into claims of third persons in respect of property attached or proceeded against. Section 138 (1) provides that the purchaser of any estate, mahal, share or land sold for arrears of land revenue due in respect thereof shall acquire it free of all encumbrances imposed on it, and all grants and contracts. made in respect of it, by any person other than the purchaser. Sub sections (2), (3) and (4) make other provisions, but it is unnecessary to refer to them. Section 143 lays down that if the arrear in respect of which the property is to be sold is paid at any time before the lot is knocked down, the sale shall be stayed. Section 145 provides for application to set aside sale on deposit of arrear, and section 146 provides for application to set aside sale for irregularity. Under section 148 it is provided that on the expiry of 30 days from the date of sale if no application has been made under section 145 or 146 or no claim has been made under section 151, or if 33 such application or claim has been made. and rejected, the Dy. Commissioner shall pass an order confirming the sale. Section 151 refers to claims of pre emptions. That takes us to section 149. Section reads as follows : "(1) if no application under section 146 is made within the time allowed therefor, all claims on the grounds of irregularity or mistake shall be barred. (2) Nothing in sub section (1) shall bar the institution of a suit in the Civil Court to set aside a sale on the ground of fraud or on the ground that the arrear for which the property is sold is not due. " It would thus be seen that the scheme of the relevant provisions of the Act in relation to revenue sales appears to be self contained. The revenue process for recovering arrears begins with the report as to the arrears and ends with the confirmation of sale. Provision is made for the examination of claims of third parties as well as for setting aside sales on account of deposit or on account of irregularities committed in conducting the sales. , It is in the light of this self contained scheme that section 149 (1) provides that if no application under section 146 is made within the time prescribed, all claims on the grounds of irregularity or mistake shall be barred. In other. words '. the effect of this provision is that if a party aggrieved by a revenue sale of his property wants to challenge the validity of the said sale on grounds of irregularity or mistake, the Act has provided a remedy for him by s.146 and it he fails to avail himself of that remedy, it would not be open to him to challenge the impugned sale on the said grounds by a separate suit. The grounds of irregularity or mistake must be urged by an application made under section 146 and if no such application is made, then the party is precluded from taking the said grounds otherwise. Thus far there is no difficulty or dispute. 34 Sub section (2) of section 149 provides an exception to sections (1), and it says that the institution of a suit would not be barred in a Civil Court to set aside 'a sale on two grounds; if the sale is challenged on the ground of fraud, a suit will lie; similarly, if a sale is challenged on the ground that the arrear for which the property is sold is not due, a suit will lie. The effect of this provision is that if fraud is proved in regard to a revenue sale, a suit will lie and the sale will be set aside; similarly, if it is shown that the arrear for which the property is sold was not due, a suit will lie and the sale will be set aside. There is no difficulty or dispute about this position also. The question on which the parties are at issue before us is in regard to the interpretation of the clause "the arrear for which the property is sold. " It has been held by the High Court that what this clause requires is not that the arrear for which the property is sold should be stated with meticulous accuracy, if a mistake is made in showing the actual amount of arrear due from the defaulter for which the property is sold, that mistake would not render the sale invalid; it would be a mistake within the meaning of ss.(1) and so, to cases of that kind sub section (2) will not apply. On the other hand, Mr. Naunit Lal contends that the clause "the arrear for which the property is sold" is plain and unambiguous. In considering the question as to whether this clause is attracted or not, one has to look at the proclamation of sale and enquire whether the amount shown as arrears due from the defaulter was in fact due or not. If the said amount was not due, the clause will apply notwithstanding the fact that a lesser amount may have been due from the said defaulter. In construing section 149(2) it is relevant to remember that the provision in question is made in relation to revenue sales and there is no doubt that the revenue sales are authorised to be held under the summary procedure prescribed by the relevant sections of the 35 Act, and so, it would not be unreasonable to construe these provisions strictly. That is why we are not inclined to accept the view that in interpreting the relevant clause, we should assume that the Legislature did not expect the authorities to specify the arrear for which the property is sold with meticulous care. If the defaulter 's property is being sold under revenue sale and the object of issuing the proclamation is to show for what arrear it is being sold, it is, we think, fair to assume that the said arrear must be stated with absolute accuracy. It would not be enough to say that some arrear was due and so, the sale should be upheld though it was purported to be held for recovery of a much larger arrear. Nor is this consideration purely academic. As we have seen, section 143 provides that if the arrear in respect of which the property is to be sold is paid before the lot is knocked down, the sale shall be stayed. In the present case, if the arrear had been properly shown at Rs. 730113/ , it is theoretically possible that the appellants may have been in a position to deposit this amount before the lot was knocked down and the sale would have been stayed. Since the arrear was shown to be much larger, it is theoretically possible that the appellants could not make a successful attempt to deposit the said amount. Now, in working out the provisions of section 143, there should be no difficulty in determining the amount which the defaulter has to deposit to avoid the revenue sale. The arrear in question must be correctly stated in the proclamation so that everybody concerned knows the exact amount for which the revenue sale is held. That is another consideration which supports the construction for which the appellants contend. Mr. Masodkar for respondent No. 1 argued that the construction for which the appellants contend is mechanical and it may lead to anomalies. In support of this argument, he took the illustration of a case where the amount of arrears is accurately shown in the proclamation, but after the proclamation is 36 issued, a part of it is paid by the defaulter; (as in fact Rs. 291/ were deposited by the appellants in the present case) the contention is that in such a case, if the original amount ,of arrears continues to be shown in the proclamation, the sale would be invalid on the construction suggested by the appellants. We are not impressed by this argument. Our attention has not been drawn to any specific provision of the Act under which a partial payment of the arrear due is allowed +lo be made by the defaulter. If such a payment is made, it may, at best be treated as deposited on account, and no deduction would be made from the arrear notified to be due from him in the proclamation at that stage. The only provision which has been cited before us in that behalf is section 143 and section 143 expressly provides for the payment of the whole of the arrear due and lays down that on such payment before the lot is knocked down, the sale shall be stayed. Therefore, the complication sought to be introduced by Mr. Masodkar by taking a hypothetical case of a part payment of the arrears due from the defaulter, does not affect the construction of section 149(2). It is then argued that the impugned sale cannot be said to be irregular in the present case, because on the date when it was, actually held, the amount of Rs. 1,354 /9/ was in fact due from the appellants as arrears. It is common ground that after the proclamation was issued, a further amount of arrears became due from the appellants and on the date of the sale, the total amount came to be Rs. 1,354/9/ . In our opinion, arrears accumulating. after an order for sale has been passed and the proclamation in that behalf has been issued, cannot come into the calculation while construing s.149 (2). Every arrear for which the sale is ordered must be specifically dealt with as provided by the Act. It is not open to the authorities to deal with a specific arrear as prescribed by the Act and to pass an order for sale of the defaulter 's property on the 37 basis of that arrear and then add to it subsequently accruing arrears without following the procedure prescribed in that behalf. Once the amount of arrear is determined and sale is ordered by reference to it, it is that amount which must be shown in the proclamation and it is for that amount of arrear for which the property must be sold. That, in our opinion, is clearly the effect of the relevant clause in section 149 (2). We must, therefore, hold that the High Court was in error in coming to the conclusion that the sale of the appellants ' property on the 27th February, 1941 was valid. We are satisfied that the arrear for which the appellants ' property was sold was not due within the meaning of s.149 (2), and so, the sale must be set aside. In support of his argument that the impugned sale cannot be held to be invalid, Mr. Masodkar relied on a decision of the Privy Council in Rewa Mahton vs Ram Kishen Singh(1). In that case, the Privy Council was dealing with a question which had reference to the true construction of section 246 of the Civil Procedure Code of 1877 (Act X of 1877). The said section had provided that if cross decrees between the same parties and for the payment of money be produced in the Court, execution shall be taken out only by the party who holds the decree for the larger sum, and for so much only as remains after deducting the smaller sum. It appears that contrary to the provisions of this section, an auction sale was held and when the title of the auction purchaser was challenged, it became necessary to consider that the effect of noncompliance with the provisions of section 246 would be on the title of the auction purchaser. The Privy Council held that a purchaser under a sale in execution is not bound to inquire whether the judgment debtor had a cross judgment of a higher amount such as would have rendered the order for execution incorrect. If the Court has jurisdiction, such purchaser is no more bound to inquire into the correctness of an (1) (1886) L. R. 13 I. A. 106. 38 order for execution than he is as to the correctness of the judgment upon which execution issues. In other words, the effect of this decision is that if in contravention of the provisions of section 246 an executing Court orders a sale to be held, the auction purchaser gets a good title notwithstanding non compliance with section 246. We do not see how this case can assist Mr. Masodkar in the present appeal. The decision turned upon the construction of section 246. But the present dispute has to be decided on a construction of section 149 (2). It is wellknown that execution sales held under the Code of Civil Procedure can be challenged only in the manner prescribed and for the reasons specified, say, for instance, by O. XXI r. 89, 90 and 91. The fact that certain irregularities committed during the conduct of execution sales would not render the sales invalid, flows from the relevant provisions of the Code and so, it would not be reasonable to invoke the assistance of the decisions dealing with irregularities committed in execution sales in support of the argument that a revenue sale held under section 128 (f) should be judged by the same principles. The question as to whether the revenue sale is valid or not must obviously be determined in the light of the relevant provisions of the Act and that again takes us to the construction of section 149 (2). Mr. Masodkar had also relied on the decision of the Calcutta High Court in Ram Prosad Choudhury vs Ram Jadu Lahiri (1)in support of his argument that a revenue sale held under section 128 (f) of the Act would not be rendered invalid merely because the amount of arrears shown in the proclamation is not accurate. In the case of Ram Prosad Choudhury, the sale had been held under the provisions of the Bengal Land Revenue Sales Act (Act XI of 1859). Under section 5 of the said Act, notice had to be issued before the sale could be held. In the notice. issued prior to the sale had been shown a sum which had then not become due as an arrear along with other sums (1) 39 which had become arrears, and the subsequent sale was held on the footing of the total amount thus shown being the arrears due. It was urged that the sale was invalid because of the irregularity committed in the issue of the notice under section 5. This argument was rejected and it was held that despite the said irregularity, the sale was valid. Now, in appreciating the effect of this decision ' it is necessary to refer to the provisions of section 33 of the said Act under which the sale was challenged. We have already referred to the fact that section 5 required a notice to be issued prior to the sale. The notice provided for by this section had to specify the nature and amount of arrear or demand, and the latest date on which payment thereof shall be received. Section 33 provides that no sale for arrears of revenue shall be annulled, except upon the ground of its having been made contrary to the provisions of this Act, and then only on proof that the plaintiff has sustained substantial injury by reason of the irregularity complained of '; with the rest of the section we are not concerned. The argument which was urged in the case of Ram Prosad Choudhury was that the notice under section 5 having been irregularly issued, the sale should be deemed to have been held contrary to the provisions of the said Act, and this argument was not accepted. It would be noticed that section 33 justifies a claim for annulling the sale only if two conditions are satisfied; that the sale should have been made contrary to the provisions of the Act and that the plaintiff must show that he has sustained substantial injury by reason of the irregularity complained of. It is in the context of these requirements that the Calcutta High Court held that the inclusion of an amount in the notice which had not become an arrear on the date of the notice did not render the impugned sale invalid. We do not think that this decision can assist us in interpreting section 149 (2) with which we are concerned. The scope and effect of the relevant provisions of section 149(2) are not at all similar to the scope and effect of 40 s.33 of the Bengal Act. Therefore, we are not inclined to accept Mr. Masodkar 's argument that the defect in the sale on which the appellants rely would not render the sale invalid. The result is, the appeal is allowed, the decree passed by the High Court is set aside and the appellants ' suit decreed, There would be no order as to cost throughout. Appeal allowed.

The appellants are Lambardars of Mahal No.2 of Mouza Gujarkhedi, and they held therein an undivided share of As. /II / and as they were found in arrears of land revenue to the extent of Rs. 730/13/ , the property was sold for Rs. 600/ but the sale proclamation recited the amount of arrears due as Rs. 1345 9 0 and that the properties were being sold for 29 recovering that amount. It was contended by the appellants, that it was open to them to have the sale set aside in the Civil Court on the ground that the arrear for which the property was sold was not due. The trial court dismissed the suit on the ground that the suit did not lie and the High Court affirmed the decision. Held, that section 149 (2) of the Act was plain and unambiguous and that if the arrear in respect of which the sale was held was not due it gave a right to the owner of the property to have the sale set aside in a Civil Court. The fact that subsequent to the sale proclamation but on the date of the sale further amounts towards land revenue had become due was not material, the scheme of the Act being that in respect of each specific arrear separate proceedings had to be taken. Held, further, that mistakes and irregularities contemplated by the Act which would not furnish grounds for invalidating and setting aside the sale were of a different kind and from the scheme of the Act it is clear that a sale for an arrear that was not due was put in a separate category. Rewa Mahten vs Ram Kishan Singh (1886) L.R. 13 I.A. 106 and Ram Prosad Choudhury vs Ram Jadu Lahiri, (1936) 40 C.W.N. 1054, distinguished.

: Criminal Appeal No. 310 & 363 of 1976. (From the Judgments and Orders dated the 1st September, 1975 of the Bombay High Court in Criminal Appln. No. 20/75) and Criminal Appeals Nos. : 348 349, 350, 195 201, 170 176, & Crl. 181 182 of 1976. (Appeals by Special Leave Petitions from the Judgments and Orders dated the 14th/18th July, 1975, 9th July, 1975, 3rd April, 1976, 13th March, 1976, and 19th March, 1975, of the Bombay High Court in Criminal Appln. Nos. 794, 784/75, 833 839/76 and 614620/76 and 385 386/76 respectively and Criminal Appeal No. 397 of 1976. (Appeals by Special Leave from the Judgments and Orders dated the 23rd March, 1976 and 6th April, 1976 of the Karna taka High Court in Writ Petitions Nos. 1454 and 2096/76 respectively) and Criminal Appeal No. 397 of 1976. (From the Judgment and Order dated the 3rd September, 1975 of the Bombay High Court in Criminal Application No. 792/75) and CIVIL APPELLATE JURISDICTION: Civil Appeal No. 573 of 1976. (Appeal by Special Leave from the Judgment and Order dated the 26th March, 1976 of the Bombay High Court in Criminal Appln. No. 31 of 1976) and Special Leave Petitions (Civil) Nos. 2443 2444, 2864, 3061 of 1976. (From the Judgments & orders dated 8 4 76, 7 4 76, 12 4 76 & 8 4 76 of the Karnataka High Court in W.P. Nos. 2918/76, 6693/75, 1977, 2012 & 1295/76) and Dy. 3002 & 3003 0f 1976. (From the Judgments and Orders dated the 8 4 1976 of the Karnataka High Court in Writ Petitions Nos. 2355 and 1968 of 1976 respectively) and Civil Appeals Nos. 1365 1367 of 1976. (From the Judgment and Order dated the 23 3 1976 of the Karnataka High Court in Writ Petitions Nos. 2293, 2477 and 2503/76 respectively) and 723 Civil Appeal No. 434 of 1976. (From the Judgment and Order dated the 1 4 1976 of the Karnataka High Court in IA No. IV in Writ Petition No. 4177 of 1970). Narayan Nettar for the appellants in Crl. A. 210 and CAs Nos. 1365 1367/76 and Crl. A. 192 and for Petitioners in SLPs (Civil) Nos. 2443, 2444, 2864, 2865 and 3061/76 and R. 3 in CA 434/76. V.P. Raman, Addl. (In Crl. A 310, 348, 397, 195 and 181/76), M/s. R.N. Sachthey and M.N. Shroff with him for the Appellant in Crl. A. 310, 348, 397, 349, 350, 363, 170 176, 181,182 add 195 201 and C.A. 573/76 and 434/76 and for R. 3 in Crl. A. 310 and 348 and RR 2 and 4 in Crl. A. 350/76. Jail Petitioners for the Petitioners in Petn. Under Dy. No. 3002 3003/76. H.M. Seervai (In Crl. A. Nos. 310, 340, 349, 363 and CA 573/ 76), Ashok H. Desai, A.J. Rane. (In CA 573/76), L R. Gagrat and B.R. Agarwala for RR. 1 and 2 in Crl. A. 310, 363 and 397 and R. 1 in Crl. 348 349 and RR in CA 573/76. A.K. Sen, R.H. Dhebar and B.V. Desai for R. 1 in Crl. A. No. 350/76. V.M. Tarkunde, Ashok H. Desai and V.N. Ganpule for RR in Crl. A. 170 to 176, 181, 182, 195 201/76. H.M. Seervai, Dr. N. M. Ghatate, section Balakrishnan, section section Khanduja, (Miss) Rani Jethamalani and Altar Ahmed for R. 1 in CA 434/76. The Judgment of A.N. Ray C.J. and Jaswant Singh, J. was delivered by Jaswant Singh J., Beg, J. gave a separate opinion. JASWANT SINGH J. These appeals, some of which have been preferred by certificates granted under Articles 133 and 134(1)(e) of the Constitution and Others by Special leave granted by this Court under Article 136 of the Constitution, and which are directed against various final and interim judgments and orders of the High Courts of Bombay and Karna taka passed in writ petitions filed under Articles 226 and 227 of the Constitution by or on behalf of certain persons who are detained under orders of the appropriate authorities made under section 3 of the (Act No. 52 of 1974) (hereinafter referred to as 'the Act ') complaining of certain constraints imposed on them under orders made under section 5 of the Act and claiming facilities in excess of those provided in the said orders, shall be disposed 0f by this judgment. A gist of the orders appealed against 12 112SCI/77. 724 and particulars of the petitions in which they have been passed given in the sub joined table for facility of refer ence : FIRST BATCH OF APPEALS 1.Sr. No. 2.No. of appeal 3. Date of the order appealed against 4. No. of the application in which the order appealed against has been passed 5. Name of the High Court which passed the order 6. Name of the detenu in whose favour or against whom the order against has been passed. substance of the order appealed against Sr. No. 1 2. 310/1976 3. 1 9 1975 4. Application No. 20/1975 5. Bombay 6. Krishna Budha Gawda 7. Clauses 9(iii) 10, 12(i)and (xi), 19, 20, 21, 23, 24 and 31 of the Conservation of Foreign Exchange and Prevention of Smugling Activities (Maharashtra Conditions of Deten tion) Order, 1974 struck down and directions issued requiring the detaining authority to keep the detenu under detention as a 'civil prisoner ' within the terms of and in all respects in conformity with the provi sions of the and further directing the detaining authority to,permit the detenu to maintain himself by receiving such funds not exceeding the sum of Rs. 200/ per month us he may desire to have lot that purpose from any of his rela tives or friends, and to purchase or receive from private sources at proper hours food. clothing, bedding, and other necessaries, including toilet requisites, toilet soap. cigarettes and tobacco, subject to examina tion gild to such rules, if any, as may be approved by the Inspector General , as also to permit the detenu to meet persons with whom he may desire to communicate at proper times anti tinder proper restrictions. No. 2. A. No. 3. do Sr. No. 3 2. A. No. 397/1976 3. 3 9 1975 4. Application No. 792/1975 5. Bombay ram Kewalji 6. Ghamandi Gowani 7. [Nil] SECOND BATCH OF APPEALS Sr. No.1. A. No.348/1976 3. Interim order dated 14 7 1975 4. Application No. 794/1975 5. Bombay 6. Ramlal Narang 7. Directions issued to the detaining authority to permit the detenu (1) to have his food from out side at his own expense, subject to routine check: (2) to have one interview with his legal advisers for two hours in the presences 725 of a Customs Officer, but not within Iris hearing; (3) to have one interview per month with ally Of tile Family members, which should be in accordance with and subject to subclauses (iii), (vi), (vii) and (ix)of clause 12 of the Conservation of Foreign Exchange and Prevention of Smug gling Activities (Maharashtra Conditions of Detention) Order, 1974. No 348/1976 3. Interim order dated 14 7 1975 4. Application No. 794/1975 5. Bombay 6. Yusuf Abdulla Patel 7. Directions issued to the detaining authority (1) to permit the detenu to have his food from outside at his own expense subject to routine check,(2) to have the detenu exam ined at least once a week by Doctors at St. George 's Hospital and to permit the detenu 's doctor being present at such examination. (3) to permit the detenu to take specially prescribed medicines at his own cost.(4) not to remove the detenu to another jail from the Arthur Road Prison, Bombay, without giving at least 24 hours notice in writing (excluding Sundays and other holidays) to his Attorneys, (5) to permit the detenu to have one interview with his legal advis ers for two hours in the presence of a Customs Officer but not within his hear ing and (6) to permit the detenu to have interview with relatives as per clause 12(ii) of Maharashtra Conditions of Detention Order, 1974. THIRD BATCH OF APPEALS Sr. No .1 2. 195 201/1976 3. 3 4 1976 4. Applications 833 839/1976 5. Bombay 6. Ratan Singh Gokaldas Rajda & others 7. Directions issued to the detaining au thority to have the detenus taken under custody to the site of the meeting of the Bombay Municipal Corporation and enable them to exercise their votes at the mayoral election.if and when it takes place. No. 2 2. Nos. 170 176/1976 3. 13 3 1975 4. Applications 614 620/1975 5. Bombay 6. Ahilya Pandurang Rangankar and others 7. While rejecting the application for release on parole directions issued the detaining in authority to have the detenus taken under custody to vote at the election of statutory Com mittees to be held on 15 3 1976 at 3 P.M. at the Bombay Municipal Corporation Bom bay. 726 Sr. No. 3 2. 181 182/1976 3. 19 3 1976 4. Applications Nos. 385 386/1976 5. Bombay 6. Ganesh Prabhakar Pradhan and others 7. Directions issued to the detaining author ity to have the the detenus taken under custo dy to the Maharashtra Legislative Council Hall for the limited purpose of enabling them to exercise their right to the statutory Committ ess on 30 3 1976. No. 4 2. Crl As. 1365 67/1976 3. 23 3 1976 4. W. Ps. 2293, 2477, 2503/1976 5. Karnataka 6. C.R. satish and Others 7. Directions issued to the detaining authority to have the detenus taken not later than 11 A.M. on 24 3 1976 under police escort to the place where the election of the President of the Town Municipal Council, Chikmaglur was to be held and after they exercised their right to vote to have them brought back under police escort to the jails in which they were then detained. No. 5 2. C.A. Nos. 434/1976 3. 1 4 1976 4. I.A. No. IV W.P. No. 4177/1976 5. Karnataka 6. L.K. Advani 7. Directions issued to the detaining authority to have the detenu taken under police escort to New Delhi so as to enable him to be in Rajya Sabha on 3 4 1976 before 10.45 A.M. and to allow him to take oath of affirma tion and thereafter to take his seat in Rajya Sabha and to have him brought back under police escort to the Central Jail Banglore on 3 4 1976 or on 4 4 1976 whichever date is convenient to the detaining authority. FOURTH BATCH OF APPEALS Sr. No. 1 2. A. No. 192/1976 3. 23 3 1976 4. W.P. Nos 1454/1973 5. Karnataka 6. Gurunath Kulkarni 7. Directions issued to the detaining authority (1) to have the detenu taken under police escort on or before 3 4 1976 to the shops in Bellary to enable them to purchase stationary required for the examination and to the college where detenu had 10 get the admission ticket to the examination. (2) to have the detenu taken on each day of the examination under police escort from the jail at Bellary to the Examination centre and to see that he reached such centre at least 20 minutes before the commencement of the examination and was brought back after the day 's examination was over from such centre to the jail under police escort. Directions also issued to the jail authorities to ascertain well in advance the programme of the examination which the detenu had to take. 727 Sr. No. 2 2. A. No. 210/1976 3. 6 4 1976 4. W.P. No. 2096/1976 5. Karnataka 6.K.T. Shivanna 7. Directions issued to the detaining authority to release the detenu on parole on the afternoon of 10 4 1976. The detaining authority also directed to arrange to have the detenu either taken under police escort to his home at Novavirakare, Tiprut Talu, starting from Bangalore on the afternoon of 10 4 1976 and to have him brought back under police escort from his home to the Central Jail, Bangalore, starting from Honavinskere on the afternoon of 12 4 1976 OR release the detenu at the gate of the Central jail Bangalore on his executing a self bound for Rs. 6,000/ undertaking to surrender himself to the jail authorities on 12 4 1976 not later than 6 P.M. and not take part in political activ ities or other activities detrimental to the security of the State during the period he remained on parole. The police, however given the liberty to keep a watch around the detenu 's house and to follow his movements outside his house during the period he continued on parole. No. 3 2. S.L.P.(Civil) No. 2443/1976 3. 8 4 1976 4. W.P. No.2918/1972 5. Karnataka 6. K.A.Nagaraj 7. Directions issued to the detaining authority (1) to release the detenu on pa role, (2) to have the detenu taken on the evening of 9 4 1976 under police escort to his houses and brought back to the Central Jail, Bangalore. under police escort on the evening of 10 4 1976; and (3) again have the detenu taken on the evening 01 14 4 1976 under police escort to his house and brought back under police escort to the Central Jail, Bangalore, on the evening of 15 4 1976. The police, however, given tile liberty to keep a watch around the house of the detenu and to follow his movements during the period he remained on parole. No. 4 2. S.L.P.(Civil) No. 2444/1976 3. 8 4 1976 4. W.P. No.6693/1975 5. Karnataka 6. P.B.Satyanarayana Rao 7. Directions issued to the detaining authority to release the detenu on parole on 14 4 1976 and to have him taken under police escort to his home and brought back under police escort to the jail On the afternoon of 16 4 1976. The police, howev er, given the liberty to keep a watch around the house of the detenu and to watch his movement outside his house during his release on parole. 728 Sr. No. 5 2. S.L.P.(Civil) No. 2864/1976 3. 7 4 1976 4. W.P. No. 1977/1976 5. Karnataka 6. M.Sanjeev Gatti 7. Directions issued to the detaining author ity either (i) to arrange the detenu taken under police escort to his native place. Bangalore, starting from Bangalore on 8 4 1976 and brought back under police escort to the Central Jail Bangalore on 14 4 1976. and (ii) to release the detenu at the gate of the Central Jail. Bangalore. on the morning of 8 4 1976 his executing a sell bond of Rs. 5,000/ undertaking to surrender himself to the jail authorities not later than 5 P.M. on 15 4 1976 and not to take part in any political activity or other activity detrimental to the security of the State. The police, however, given the liberty to keep a watch around the house houses in which the detenu stayed and to follow his movements outside the house or houses during the period he remained on parole. No. 6 2. S.L.P. (Civil) No. 2865/1976 3. 8 4 1976 4. W.P. No. 2012/1976 5. Karnataka 6. V.S. Acharya 7. Directions issued to the detaining authority either to arrange to have the detenu taken under police escort from Central Jail. Bangalore, to Udupi starting from Bangalore on the morning of 13 4 1976 and to have him brought back under police escort from Udupi starting there from on the morning of 21 4 1976 or release the detenu at the gate of the Central Jail, Bangalore, on his execut ing a self bond lot Rs. 5,000/ undertaking not to take part in any political activity or in any activity detrimental to the security of the State during the period he remained on parole as to surrender him self to the Jail authorities not later than 6 P.M. on 21 4 1976. The police however, given the liberty to keep a watch over the detenu and to follow him movements during the period he remained on parole. No. 7 2. S.L.P. (Civil) No. 3061/1976 3. 8 4 1976 4. W.P. No. 1295/1976 5.Karnataka 6. C.V.Shankar Rao Jadhav 7. Directions issued to the detaining authority either (1) to arrange to have the detenu taken too his home at Nandya under police escort starting from Bangalore on the evening of 10 4 1976 and to have him brought back under police escort to the Central Jail Bengal starting from Nandya on the morning 13 4 1977. 729 or (2) to release him at the gate of the Central Jail, Bangalore on the evening of 10 4 1976 on his executing a self bond for Rs. 5,000/ undertaking to surrender himself to the Jail authorities not later than 4 P.M. on 12 4 1976 and not to take part in any political activity or other activity detrimental to the security of the State during the period of his release on parole. The police, however, given the liberty to keep a watch around the detenu 's house and to follow his movements outside his house during the period of his release on parole. FIFTH BATCH OF APPEALS Sr. No. 1 2. No. 3002/1976 3. 8 4 1976 4. W.P. No. 2355/1976 5. Karnataka 6. D.J. Shivaram 7. Prayer of the detenu allow him to be released on parole to enable him to take the final LL.B. examination rejected in view of the orders made by this Court i.e. the Su preme Court in High Court W.P. No. 1454/1976 Sr. No. 2. 2. No.3003/1976 3. 8 4 1976 4. W.P. No. 1968/1976 5. Karnataka 6. Hanumant Gururao Inamdar 7. Prayer of the detenu to allow him to be released on parole to enable him to take the Second Year LL.B. examination rejected in view of the orders made by this Court on in High Court W.P. No. 1454/1976. SIXTH BATCH OF APPEALS Sr. No.1 2. C.A. No. 349/1976 3. 18 7 1975 4. Application No.794/1975 5. Bombay 6. Ramlal Narang 7. Directions issued to the detaining authority not to remove the detenu till further order to another jail outside the State without giving at least 3 hours notice in writing (excluding Sunday and holidays to the detenu attorneys. No. 2. 2. C.A. No. 573/1976 3. 20 3 1976 4. Application No. 31/1976 5. Bombay 6. Prabhudas Tribhovandas 7. Directions issued to the detaining authority to detain the detenu in such prison where the detenu would have the bene fit of the Company of other women detenus as also other facilities under the rules. Clauses 9(iii), 10, 12(ii) & (xi), 19, 20, 21, 23, 24 & 31 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities (Maharashtra Conditions of Detention) Order, 1974 (hereinafter referred to as "the Maharashtra Conditions of Detention Order, 1974") which have been struck down by the High Court of Bombay read as under : "9. . . . . 730 (iii) Security prisoners shall not be allowed to supplement their diet even at their own expense. Any security prisoner who wishes to supplement his diet on medical grounds. may apply to the Commissioner or the Superintend ent, as the case may be. The Commissioner or the Superintendent shah get him examined by a Medical Officer attached to the place of detention who may order such modification of, or addition to, his diet, as he may consider necessary on medical grounds. Supply of funds : (i) A security prison er may, with the previous sanction of the detaining authority, receive from a specified relative or friend at intervals of not less than a month, funds not exceeding Rs. 30/ per month and may spend these funds or a similar sum from his own private funds on such objects and in such manner as may be permissi ble under the rules, in case in which for want of funds any security prisoners are compelled to do without small amenities which their fellow prisoners enjoy, such amenities may, if considered absolutely necessary by the Commis sioner or the Superintendent be supplied to them at Government costs. (ii) All funds so received shall be kept by the Commissioner or the Superintendent and spent by him on behalf of the security prison ers concerned. (iii) Amounts in excess of those pre scribed in subclause (i) may be received by the Commissioner or the Superintendent on behalf of security prisoners, but they shall not be spent in any month beyond the limits laid down in the said sub clause. 12. . . (ii) The number of interviews which a security prisoner may be permitted to have shall not ordinarily exceed one per month. (xi) In addition to the interviews permis sible under the preceding provisions of this clause, a security prisoner may with the permission of the detaining authority, be granted not more than two special interviews, for the settlement of his business or profes sional affairs, such interviews shall ordi narily take place within a period not exceed ing two months from the date of detention of the security prisoner. concerned and shall be conducted in accordance with the provisions of this clause as regards place, duration and conditions of the interview, and the proceed ings shall be strictly confined to the objects for which the interview is granted. Medical attendance : (i) The Superin tendent of the Hospital or the Civil Surgeon, as the case may be, shall depute a medical officer to visit each security prisoner de tained 731 in a police lock up and report of his physical condition. The said Medical Officer shall visit the prisoner at least once a week and more often if the Superintendent of the Hospi tal or the Civil Surgeon or the Commissioner as the ease may be thinks fit, and submit the report on his condition to the Commissioner or the detaining authority, after the first day of each month and at any other time he considers necessary. (ii) Security prisoner detained in a jail or sub jail shall in the event of illness, be treated in the same way as convicted criminal prisoner or treated under the rules made under the . 20. Toilet : (i) Every security prisoner shall be supplied with neam or babul stick at Government expense. (ii) Every security prisoner shall be supplied with one cake of jail made toilet soap per month for bathing at Government expense. The weight of such cake shall be 113 grams approximately and if jail made soap is not available in any medium quality, toilet soap manufactured in India: and available locally shall be supplied. Service of barbers etc. : (i) A securi ty prisoner shall not be permitted to have shaving equipment of his own. (ii) Every security prisoner shall be allowed to have the services of the jail barber once a week. Smoking and tobacco: Except cigarettes or bidies and chewing tobacco, which are available at the jail canteen, no other facil ities to smoke or chew tobacco shall be per mitted. Games : Security prisoners shall not be pertained to play indoor games like cards or to play chess, draughts and carrom. Power to withhold any concessions or facilities: The State Government may, by general or special order, withhold any of the concessions or facilities provided by or under any of the provisions of this order in respect of any security prisoner or class of security prisoner, and for such period or periods, as the State Government may, from time to time specify. Appearing on behalf of the Union of India and the States of Maharashtra and Karnataka, the learned Additional Solicitor General has, while very fairly stating that though the appropriate Government may have no objection to the issue of special orders permitting the detenus to receive or purchase toilet requisites, toilet soap and to consult private doctors in case of genuine necessity if an applica tion is made to it in that behalf, submitted that the right of any person to 732 move any court for the enforcement of the rights conferred by Article 21 (which is the sole repository of the right to life and personal liberty) and Articles 14, 19 and 22 of the Constitution having been suspended by virtue of the Presidential Orders dated June 27, 1975 and January 8. 1976 issued under clause (1) of Article 359 of the Constitution (which are absolute in terms) for the period during which , the proclamation of emergency made on June 25, 1975 under clause (1) of Article 352 of the Constitution is in force, no person has a locus standi to move any application under Article 226 or Article 227 of the Constitution for issue of a writ, order or direction to enforce any right to personal liberty. He has further urged that since it is for the appropriate Government to specify the place of a detenu 's detention and to lay down by means of a general or special order the conditions as to his maintenance, interviews or communications with others with a view to prevent his con tact with the outside world and sincewhat was sought to be enforced in the instant cases by means of the applications filed by or on behalf of the detenus under Article 226 and 227 of the Constitution in the aforesaid High Courts was nothing but various facts of personal liberty under Articles 19, 21 and 22 of the Constitution, the applications were not maintainable and the High Courts were not competent to deal with them and to either strike down the aforesaid clauses of the Maharashtra Conditions of Detention Order, 1974 or to issue the aforesaid directions to the detain ing authorities. Mr. Seervai Mr. Ashok Sen, Mr. Desai and Mr. Dattar, learned counsel for the detenus have, on the other hand, emphasized: (1) that preventive detention does not stand on the samefooting as punitive detention and while it cannot be gainsaid that persons who can be prosecuted and punished for offences against the law can also be preventively detained they cannot be punitively treated; (2) that considerations relevant for applica tions seeking relief of release by habeas corpus are not relevant to cases in, which conditions of detention fall for considera tion; (3) that the principle of legality and the doctrine of ultra vires are not abrogated even during the times of emergency and the exercise of power under section 5 of the Act must have a reasonable nexus with the purpose for which the power is conferred; (4) that if according to the majority judgment in Additional District Magistrate, Jabalpur vs Shiva Kant Shukla(1) even habeas corpus could issue in cases where the order is not duly authenticated then the conditions of detention can certainly be scrutinized and relief can be granted if those conditions are found to be illegal or ultra vires; (1) ; A.I.R. 1976 S,C. 1207.=[1976] Supp. S,C.R. 172. 733 (5) that the aforesaid clauses of the Maha rashtra Conditions of Detention Order, 1974, being ultra vires and violative of the princi ples of reasonableness and legality have rightly have been struck down by the High Court of Bombay: (6) that a curtain cannot be drawn round the detenu ,red while he can be cut off from undesirable contacts, he cannot be cut off from unobjectionable contacts; (7) that if the place of detention mentioned in a detention order is a prison, then the detenu would be governed by the but not if the detenu is lodged elsewhere; (8) that the detenus ' grievances are not 'echoes ' of Article of the Constitution but are the echoes of the 'totality ' law; (9) that it is not right to say that what is not contained in Article 19 of the Constitu tion is contained in Article 21 of the Consti tution as this submission ignores Articles 15, 25 and 26 of the Constitution which are ap plicable even to non citizens. The learned Additional Solicitor General has, in his rejoinder, contended that while total release is of course different from regulating conditions of detention, the former not being available by virtue of the Presidential Orders dated 27th June, 1975 and January 8, 1976 issued under Article 359 (1) of the Constitution which are uncondi tional even conditions of detention cannot be enforced by moving a court during the period of emergency and that the contention based upon the principles of legality and reason ables and doctrine of ultra vires is misconceived. The Additional Solicitor General has further submitted that legality has to be understood as meaning the authority of law and it so understood, a person detained in accordance with the conditions framed under section 5 of the Act cannot complain that the conditions are illegal or ultra vires, broader challenges based on fundamental rights not being available; that the principle of reasonableness and the doctrine of ultra vires have no bearing on subordinate legislation framed under emergency laws; that the court cannot grant relief on vague and indeterminate philosophical theories like the totality of law; that as the line of demarcation between preventive and punitive detention which is easily perceivable at the stage of detention becomes progressively elusive and hazy when one comes to conditions of detention. there is little scope for generalisation; that curtain has to be drawn round a detenu to ensure effective ness of detention which cannot be sacrificed in the interest of security of the State; that the observations made by the majority in Shivakant Shukla 's case (supra) regarding the area of judicial interference which are sought to be relied upon on behalf of the detenus relate to the obvious eases where the Executive itself could not and would not seek to defend a detention order and can be of no assistance in the present cases where the detenus seek to 734 enforce a right to do something or to get something which is not con t:erred on and given to them by law; that any right to personal liberty or any facet or aspect thereof has to be found in some constitutional provision to be enforced in normal times and ex hypothesi to become unenforceable during an emergency and reference to Articles 15, 25 and 26 of the Constitution completely ignores the fact that these rights postulate a free citizen and cannot be enforced independent ly of Article 21 or Article 19 of the Constitution and in any case, the rights claimed in the present cases have no relation to those Articles. Without prejudice to the aforementioned contentions advanced by him the learned Additional Solicitor General has further submitted that it is only where there are specific provisions in the rules framed trader section 5 of the ' Act that those provisions being conditions of detention can be enforced when still available to an individual detenu that the provisions of Maharashtra Conditions of Detention Order, 1974 have to be examined and scrutinized to see if the facilities claimed by the detenus are excluded by impli cation, e.g. where a provision for a particular number of interviews is made, it necessarily implies a prohibition against having more interviews; that the question whether a particular act which is not specifically prohibited should be permitted or not has to be decided by keeping in view the effectiveness of detention; that allowing a detenu to go and vote at a corporate election or to take part in legislative proceedings is destructive of the purpose of detention and in any event approach must be made to the Executive to exercise its rights of parole or relaxation which is implic it in sections 12 and 5 of the Act as for instance if the release is necessitated by exigencies like performance of obsequieal ceremonies or sharadh of a kith and kin, but an order directing the detenu to be taken under police guard to the place where obsequies of a dead relation are to be performed cannot be made by a court as it tantamounts to onforcing his personal liberty; that while Iramane consider ations are generally borne in mind by the authorities having the custody of the detenus and appropriate Government, they cannot furnish reliable basis for judicial relief; that the aforesaid directions of the Bombay High Court equating detenus with 'civil prisoners ' amenable to the , does not only amount to a substitution or re enactment of section 5 of the Act i.e. of the but is also opposed to the definition of the 'prisoner ' as contained in the Bombay Jail Manual which has not been amended so as to include persons directed to be detained under any Central or other Act providing for detention; that the mere fact that a person is detained for purposes of administrative convenience in a jail does not mean that he is a civil prisoner or that the applies to him; and that the necessity of having provisions in the condi tions of detention orders enabling a detenu to consult pri vate doctors in the presence of the official doctors in case of genuine necessity or to supplement his diet on medical grounds or to indulge in harmless pastimes like chess or carrom or to appear in examinations are matters for which the appropriate Government should be approached. 735 We have given our anxious consideration to the submis sion made by counsel for the parties. In our judgment, the vital question of fundamental importance that requires to be determined at the threshold in the instant cases is whether in view of the orders dated June 27, 1975 and Janu ary 8, 1976 issued by the President under clause (1) Article 359 of the Constitution, the aforesaid petitions under Articles 226 and 227 of the Constitution were maintainable. For a proper determination of the question, it is necessary to advert to the provisions of Articles 352, 353, 358 and 359 contained in Part XVIII of the Constitution called the Emergency Provisions, as well as to the Presiden tial Orders dated November 3, 1962, December 3, 1971, Novem ber 16, 1974, June 25, 1975, June 27, 1975 and January 8, 1976. The aforesaid Articles of the Constitution are in these terms : "Article 352. (1) If the President is satisfied that a grave emergency exists where by the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal dis turbance, he may, by Proclamation make a declaration to that effect. (2) A Proclamation issued under clause (1) (a) may be revoked by subsequent Proclamation; (b) shall be laid before each House of Parlia ment; (c) shall cease to operate at the expiration of two months unless before the expiration of that period it has been approved by resolu tions of both Houses of Parliament; Provided that if any such Proclamation is issued at a time when the House of the People has been dissolved or the dissolution of the House of the People takes place during the period of two months referred to in sub clause (c), and if a resolution approving the Procla mation has been passed by the Council of States, but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period, the Proclamation shall cease to oper ate at the expiration of thirty days from the date on which the House of the People first sits after its reconstruction unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of People. (3) A Proclamation of Emergency declaring that the security of India or of any part of the territory thereof is threatened by war or by external aggression or by internal disturb ance may be made before the actual occurrence of war or of any such aggression or disturb ance if the President is satisfied that there is imminent danger thereof. 736 ** (4) The power conferred on the President by this article shall include the power to issue different proclamations on different grounds, being war or external aggression or internal disturbance or imminent danger of war or external aggression or internal disturbance whether or not there is a Proclamation already issued by the President under clause (1), and such Proclamation is in operation. (5) Notwithstanding anything in this Constitu tion, (a) the satisfaction of the President men tioned in clause (1) and clause (3) shall be final and conclusive and shall not be ques tioned in any court on any ground; (b) subject to the provisions of clause (2), neither the Supreme Court nor any other court shall have jurisdiction to entertain any question, on any ground, regarding the validi ty of (i) a declaration made by Proclamation by the President to the effect stated in clause (1); or (ii) the continued operation of such Proclama tion." "Article 353. While a Proclamation of Emer gency is in operation then (a) notwithstanding anything in this Con stitution, the executive power of the Union shall extend to the giving of directions to any State as to the manner in which the executive power there of is to be exercised; (b) the power of Parliament to make laws with respect to any matter shall include power to make laws conferring powers and imposing duties, or authorising the Conferring of powers and the imposition of duties, upon the Union or officers and authorities of the Union as respects that matter, notwithstanding ' that it is one which is not enumerated in the Union List." "Article 358. While a Proclamation of Emer gency is in operation, nothing in Article 19 shall restrict the power of the State as defined in Part III to make any law or to take any executive action which the State would but for the provisions contained in that Part be competent to make or to take, but any law so made shall, to. the extent of the incompeten cy, cease to have effect as soon as the Proc lamation ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect." ** Inserted retrospectively by section 5 of the Constitution (Thirty eighth Amendment) Act, 1975. 737 "Article 359. (1) Where a Proclamation of Emergency is in operation, the President may by order declare that the fight to move any court for the enforcement of such of the rights conferred by Part III as may be men tioned in the order and all proceedings pending in any court for the enforcement of the rights so mentioned shall remain suspended for the period during which the Proclamation is in force or for such shorter period as may be specified in the order. **(1A) While an order made under clause (1) mentioning any of the rights conferred by Part III is in operation, nothing in that Part conferring those rights shall restrict the power of the State us defined in the said Part to make any law or to take any execu tive action which the State would but for the provisions contained in that Part be competent to make or to take, but any law so made shall, to the extent of the incompetency, cease to have effect as soon as the order aforesaid ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect. (2) An order made as aforesaid may extend to the whole or any part of the territory of India. (3) Every order made under clause (1) shall, as soon as may be after it is made, be laid before each House of Parliament. " It is hardly necessary to emphasize that the provisions of the Articles reproduced above arc designed to arm the State with special powers to meet extraordinary situations created in times of grave national emergencies due to war, external aggression and internal disturbance when the secu rity of the State nay the very existence of the nation is threatened necessitating the subordination of individual rights to the paramount consideration of the welfare of the State, and to give effect to the well recognized principle to which particular attention was called by E.C.S. Wade and Godfrey Phillips by inserting the following passage in their Constitutional Law, 8th Edition, Chapter 48, pp. 717, 718: "It has always been recognized that times of grave national emergency demand the grant of special powers to the Executive. At such times arbitrary arrest and imprisonment may be legalised by Act of Parliament. " It is, however, necessary to state that there is an appreciable difference between Articles 358 and 359(1) of the Constitution. Whereas simultaneously with the declara tion of emergency under Article 352, Article 358 by its own force removes the restrictions on the power of the Legislature to make laws inconsistent with Article 19 of the Constitution as also on the power of the Executive to take ** Inserted retrospectively by section 7 of the Constitu tion (Thirty eighth Amendment) Act, 1975. 738 actions which may be repugnant to Article 19 of the Consti tution so long as the proclamation of emergency continues to operate but does not suspend any fundamental right which was available to a citizen under Article 19 of the Constitution prior to the promulgation of emergency, Article 359(1) empowers the President to suspend the right of an individual to move any court for enforcement of such of the rights conferred by Part III of the Constitution as may be speci fied by him (the President) in his order. In other words, while Article 358 proporio vigore suspends the fundamental rights guaranteed by Article 19 of the Constitution thus enabling the State during the period the proclamation of emergency is in operation to make laws in violation of Article 19 of the Constitution and to take Executive action under those laws despite the fact that those laws constitute an infringement of the rights conferred by Arti cle 19, Article 359(1) of the Constitution does not sus pend any fundamental right of its own force but authorises the President to deprive an individual of his right to approach any Court for enforcement of any or all of the rights conferred by Part III of the Constitution. In Mohd. Yaqub etc. vs The State of Jammu & Kashmir(1), a Constitu tion Bench of this Court consisting of seven Judges inter alia pointed out that there is a distinction between Arti cles 358 and 359(1) of the Constitution. Whereas Article 358 by its own force suspends the fundamental rights guaran teed by Article 19, Article 359(1) of the Constitution has the effect of suspending the enforcement of specified funda mental rights so. that these concept cannot be used to test the legality of an Executive action. Reference in this connection may also usefully be made to a passage in Shivakant Shukla 's case (supra) where my. Lord the Chief Justice who headed the majority opinion while pointing out the difference between Articles 358 and 359 of the Constitution observed : "The vital distinction between Article 358 and Article 359 is that article 358 suspends the rights only under Article 19 to the extent that the legislature can make laws contraven ing Article 19 during the operation of a Proclamation of Emergency and the Executive can take action which the Executive is competent to take under such laws. Article 358 does not suspend any fundamental fight. While a Proclamation of Emergency is in operation the Presidential Order under Article 359(1) can suspend the enforcement of any or all fundamental rights. Article 359(1) also sus pends any pending proceedings for the enforce ment of such fundamental right or rights, The purpose and object of Article 359(1) is that the enforcement of any fundamental right mentioned in the Presidential Order is barred or it remains suspended during the emergency. Another important distinction between the two Articles is that Article 358 provides for indemnity whereas Article 359(1) does not, Article 359(1A) is on the same lines as Arti cle 358 but Article 359(1A) now includes all fundamental rights which may be mentioned in a Presidential Order and is, therefore, much wider than Article 358 which includes Article 19 only. (1) ; 739 A person can enforce a fundamental right both in the case of law being made in viola tion of that right and also if the Executive acts in non compliance with valid laws or acts without the authority of law. It cannot be said that the scope of Article 359(1) is only to restrict the application of the Article to the Legislative field and not to the acts of the Executive. The reason is that any enforce ment of the fundamental rights mentioned in the Presidential Order is barred and any challenge either to law or to any act of the Executive on the ground that it is not in compliance with the valid law or without authority of law will amount 'to enforcement of fundamental rights and will, therefore, be within the mischief of the Presidential Order. The effect of the Presidential Order suspend ing the enforcement of fundamental right amounts to bar the locus standi of any person to move the court on the ground of violation of a fundamental right. " Thus the foregoing discussion makes two things perfectly clear(1) that Article 359(1) (which makes no distinction between the threat to the security of India by war or external aggression or internal disturbance) is wider in scope than Article 358 and (2) that it is not open to any one either to challenge the validity of any law or any Executive action on the ground of violation of a fundamen tal right specified in the Presidential Order promulgated under Article 359(1). of the Constitution. It would be apposite at this stage to mention that in England in Liver sidge vs Anderson(1) and Greene vs Secretary of State for Home Affairs(2) and in India in Sree Mohan Chowdhury vs The Chief Commissioner, Union Territory of Tripura(3) and Makhan Singh vs State of Punjab(4) the right of any person to challenge any executive action taken during emergency on the ground that it was arbitrary or unlawful has been negatived. In the Liversidge 's case (supra) the following memorable observations made by the House of Lords in the King vs Halliday, Ex parte zadig(5) were referred to and relied upon : "However precious the personal liberty of the subject may be, there is something for which it may well be, to some extent, sacrificed by legal enactment namely, national success in the war or escape from national plunder or enslavement. Liberty is itself the gift of the law and may by the law be forfeit ed or abridged." Having noticed the amplitude of the provisions incorpo rated in our Constitution by its rounding fathers in rela tion to the threat posed by three types of grave emergencies on the basis of the experience gained . in England and United States of America and their effect, let us now turn to the various Presidential Orders and notice their effect. (1) ; (2) (3) ; = ; (4) [1964] 4 S.C.R. 797 = A.I.R. 1964 S.C. 381. (5) ; 13 112 SCI/77. 740 Presidential Order dated November 3, 1962 issued under clause (1) of Article 359 of the Constitution after the proclamation of emergency made on October 26, 1962 under clause (1) of Article 352 of the Constitution consequent on the invasion of India by China on September 8, 1962 ran as follows : "New Delhi, the 3rd November, 1962 G.S.R. 1464 In exercise of the powers Con ferred by clause (1) of Article 359 of the Constitution, the President hereby declares that the right of any person to move any court for the enforcement of the rights conferred by Article 21 and Article 22 of the Constitution shall remain suspended for the period during which the Proclamation of Emergency issued under clause (1) of Article 352 thereof on the 26th October, 1962 is in force, if such person has been deprived of any such rights under the Defence of India Ordinance, 1962 (4 of 1962) or any rule or order made thereunder. " Be it noted that addition of Article 14 was made in the above Presidential Order of November 3, 1962 by the Presi dential Order dated November 11, 1962 and the aforesaid emergency declared on October 26, 1962 was revoked vide Presidential Order dated January 10, 1968 issued under Article 352(2)(a) of the Constitution. Proclamation of emergency issued by the President of India under Article 352(1) of the Constitution on December 3, 1971, consequent upon the Pakistani aggression reads as under : "In exercise of the powers conferred by clause (1) of Article 352 of the Constitution, I, V.V. Giri, President of India, by this. Proclamation declare that a grave emergency exists whereby the security of India is threatened by .external aggression. " Presidential Order dated November 16, 1974 issued under clause (1) of Article 359 of the Constitution is in these terms : "In exercise of the powers conferred by clause (1) of Article 359 of the Constitution, the President hereby declares that : (a) the right to move any court with respect to orders of detention which have already been made or which may hereafter be made under section 3 (1)(c) of the as amended by Ordinance II of 1974 for the enforcement of the rights conferred by Article 14, Article 21 and clauses (4), (5), (6) and (7) of Article 22 of the Constitution, and (b) all proceedings pending in any court for the enforcement of any of the aforesaid rights with respect to orders of detention made under the said section 3(1)(e) shall remain suspended for a period of six months from the 741 date of issue of this order or the period during which the Proclamation of Emergency issued under clause (1) of Article 352 of the Constitution the 3rd December, 1971, is in force, whichever period expires earlier. (2) This order shall extend to the whole of the territory of India. " On June 20, 1975, the President of India amended the above order by substituting "twelve months" for "six months" in the order. Proclamation of Emergency issued by the President of India on June 25, 1975 is to the following effect : "PROCLAMATION OF EMERGENCY. In exercise of the powers conferred by clause (1 ) of Article 352 of the Constitution, I, Fakhruddin Ali Ahmed, President of India, by this Proclamation declare that a grave emer gency exists whereby the security of India is threatended by internal disturbances. New Delhi Sd/F.A. Ahmed the 25th June, 1975 President. " Presidential Order dated June 27, 1975 promulgated under clause (1) of Article 359 of the Constitution runs thus : "In exercise of the power conferred by clause (1) of Article 359 of the Constitution, the President hereby declares that the right of any person (including a foreigner) to move any court for the enforcement of the rights con ferred by Article 14, Article 21 and Article 22 of the Constitution and all proceedings pending in any court for the enforcement of the above mentioned rights shall remain sus pended for the period during which the Procla mations of Emergency made under clause (1) of Article 352 of the Constitution on the 3rd December, 1971 and on the 25th June, 1975 are both in force. This order shall extend to. the whole of the territory of India except the State of Jammu and Kashmir. This order shall be in addition to and not in derogation of any order made before the date of this order under clause (1) of 'Article 359 of the Constitution." On June 29, 1975, another. order was issued by the President whereby the words "except the State of Jammu and Kashmir" in the order dated June 27, 1975 were omitted. On September 25, 1975, another Presidential Order was issued as a result of which the last paragraph in the Presidential Order dated June 27, 1975 was omitted. On January 8, 1976, the President issued yet another order under Article 359(1) of the Constitution declaring that the right to move 742 any court for the enforcement of the rights conferred by Article 19 and the proceedings pending in any court for the enforcement of those rights shall remain suspended during the operation of the proclamations of emergency dated Decem ber 3, 1971 and June 25, 1975. The difference between the Presidential Order dated June 27, 1975 which was supplemented by the Presidential Order dated January 8, 1976 and the earlier Presidential Orders barring the right of a person to move any court for enforce ment of certain fundamental rights conferred by Part III of the Constitution may now be noticed. While the Presidential Order dated June 27, 1975, which, as already stated, was supplemented by the Presidential Order dated January 8, 1976 was absolute and unconditional in terms, the earlier Presi dential Orders alluded to above were conditional and limited in scope. Apart from the fact that the Presidential Order dated November 3, 1962 did not make any mention of the pending proceedings, it was, as pointed out by this Court in State of Maharashtra vs Prabhakar Pandurang Sanzgiri(1) Dr. Ram Manohar Lohia vs State of Bihar(2) Makhan Singh vs State of Punjab (supra) and by the majority in .A.D.M. Jabalpur vs Shivakant Shukla (supra), hedged by a condition inasmuch as it declared that the right of any person to move any court for the enforcement of rights conferred by Articles 21 and 22 of the Constitution shall remain suspended for the period during which the proclamation of emergency issued under clause (1) of Article 352 thereof on October 26, 1962 is in force if such a person has been deprived of any such rights under the Defence of India Ordinance, 1962 (4 of 1962) (which was later on replaced by the Defence of India Act, 1962) or any rule or order made thereunder. " Accordingly, if a person was deprived of his personal liberty not under the Defence of India Act or any rule or order made there under but in contravention thereof, his locus standi to move any court for the enforcement of his rights conferred by Articles 21 and 22 of the Constitution was not barred. More or less, similar was the pattern and effect of the Presidential Order dated November 16, 1974. The position with respect to the Presidential Orders dated June 27, 1975 and January 8, 1976 is, however, quite different. These orders are not circumscribed by any limitation and their applicability is not made dependent upon the fulfilment of any condition 'precedent. They impose a total or blanket ban on the enforcement inter alia of the fundamental rights conferred by Articles 19, 21 and 22 of the Constitu tion which comprise all varieties or aspects of freedom of person compendiously described as personal liberty. (See/1. K. Gopalan vs The State of Madras(1), Kharak Singh vs State of U.P.(2) and A.D.M. Jabalpur vs Shivakant Shukla (supra). Thus there is no room for doubt that the Presidential Orders dated June 27, 1975, and January 8, 1976, unconditionally suspend the enforceability of the right conferred upon any person including a foreigner to move any court for the enforcement of the rights enshrined in Articles 14, 19, 21 and 22 of the Constitution. (1) ; = A.I.R. 1966 S.C. 1924. (2) [1966]1 S.C.R. 709 = A.I.R. 1966 S.C. 540. (3) ; = ; (4) [1964] 1 S.C.R, 332 = ; 743 The main contention advanced on behalf of the detenus that the Presidential Orders dated June 27, 1975 and January 18, 1976 do not bar the Court from examining the legality or vires or reasonableness of the Maharashtra Conditions of Detention Order, 1974 and that what is sought by means of the aforesaid petitions filed by or on their behalf is not the enforcement of the right to personal liberty conferred by Articles 14, 19, 21 and 22 of the Constitution but a redress of the complaint against illegality or ultra vires or unreasonableness of the Maharashtra Conditions of Detention Order, 1974 which imposes unwarranted constraints on them and does not provide them with facilities to which even the ordinary prisoners are entitled is totally mis conceived. It overlooks the well recognized canon of construction that the doctrines of legality and vires which are sacrosanct in times of peace have no relevance in regard to a legislative or an executive measure taken in times of emergency in the interest of the security of the State. It also ignores the well settled position that in times of, emergency when the security of the State is of utmost importance, the subordinate legislation has to be benevo lently construed and the strict yardstick of reasonableness cannot be appropriately applied. It also ignores the stark reality that the Presidential Orders dated June 27, 1975 and January 8, 1976 impose blanket bans on any and every judi cial enquiry or investigation into the validity of an order depriving a person of his personal liberty no matter whether it stems from the initial order directing his detention or from an order laying down the conditions of his detention. It has to be borne in mind that the rule of law during the emergency is no other than what is contained in Chapter XVIII of the Constitution which is the positive and tran scendental law. The following observations made by my Lord the Chief Justice in this connection in A.D.M. Jabalpur V. Shivakant Shukla 's case (supra) are worth perusing : "The Constitution is the mandate. The Constitution is the rule of law . . The rule of law is not a mere catchword or incan tation. The rule of law is not a law of nature consistent and invariable at all times and in all circumstances. The suspension of right to enforce fundamental right has the effect that the emergency provisions in Part XVIII are by themselves the rule of law during times of emergency. There cannot be :any rule of law other than the constitu tional rule of law. There cannot be any pre Constitution or post Constitution Rule of Law which can run counter to the rule of law embodied in the Constitution, nor can there be any invocation to any rule of law to nullify the constitutional provisions during the times of emergency. " Again as observed by my learned brother Beg, J. in A.D. M. Jabalpur vs Shivakant Shukla 's case (supra) "the only Rule of Law which can be recognised by Courts of our country is what is deducible from our Constitution itself. The Constitution is, for us, the embodiment of the highest "positive law" as well as the reflection of all the rules of natural or ethical or common law lying behind it which can 744 be recognised by Courts. It seems to me to be legally quite impossible to successfully appeal to some spirit of the Constitution or to any law anterior to or supposed to lie behind the Constitution to frustrate the objects of the express provisions of the Constitution. I am not aware of any Rule of law or reason which could enable us to do that. What we are asked to do seems nothing short of building some imaginary parts of a Constitution, supposed to lie behind our existing Constitution, which could take the place of those parts of our Constitution whose enforcement is sus pended and then to enforce the substitutes. Even in emer gencies, the power of the courts to test the legality of some executive act is not curtailed during the period the proclamation of emergency is in operation. Courts will apply the test of legality 'if the person aggrieved brings the action in the competent court '. But, if the locus standi of the person to move the court is gone and the competence of the court to enquire into the grievance is also impaired by inability to peruse the grounds of execu tive action of their relationship with the power to act, it is no use appealing to this Particular concept of the Rule of Law. It is just inapplicable to the situation which arises here. Such a situation is governed by the Emergency provisions of the Constitution. There provisions contain the Rule of Law for such situations in our country . . If the meaning of the emergency provisions in our Con stitution and the provisions of the Act is clearly that what lies in the executive fled, as indicated above, should not be subjected to judicial scrutiny or judged by judicial standards of correctness, I am unable to see how the courts can arrogate unto themselves a power of judicial superintendence which they do not, under the law during the emergency, possess. " The observations made by my learned brother Chandrachud, in A.D.M. Jabalpur vs Shivakant Shukla 's case (supra) are also apposite and may be conveniently referred to at this stage : "The rule of law during an emergency, is as one finds it in the provisions contained in Chapter XVIII of the Constitution. There cannot be a brooding and omnipotent rule of law drowning in its effervescence the emergen cy provisions of the Constitution. " The following observations made by my learned brother Bhagwati, J. in A.D.M. Jabal pur vs Shivakant Shukla 's case (supra) will also repay perusal : "In the ultimate analysis, the protection of personal liberty and the supremacy of law which sustains it must be governed by the Constitution itself. The Constitution is the paramount and supreme law of the land and if it says that even if a person is detained otherwise than in accordance with the law, he shah not be entitled to enforce his right of personal liberty, whilst a Presidential Order under Article 359, clause (1) specifying Article 21 is in force, the Court has to give effect to it as the plain and emphatic command of the Constitution. " 745 The observations made by this Court in Dhirubha Devisingh Gohil vs State of Bombay(1) and reiterated in A.D.M. Jabalpur vs Shivakant Shukla (supra) that if any pre Constitution right has been elevated as a fundamental right by its incorporation in Part III, the pre existing right and the fundamental right are to be considered as having been grouped together as fundamental rights conferred by the Constitution cannot also be ignored. The conclusion, therefore, seems to us to be irresisti ble that as Articles 19, 21 and 22 of the Constitution which, according to the decisions of this Court in 4. K. Gopalan vs State of Madras (supra), Kharak Singh vs State of U.P. (supra) and A.D.M. Jabalpur vs Shivakant Shukla .(supra) cover and form the source of all the varie ties or aspects of the rights that go to constitute what is compendiously described as personal liberty are suspended during the operation of the proclamation of emergency and the and the orders made or passed thereunder are not open to challenge on the ground of their being inconsistent with or repugnant to Articles 14, 19, 21 and 22 of the Constitution in view of the aforesaid Presi dential Orders dated June 27, 1975 and January 8, 1976 which totally take away the locus standi of the detenus to move any court for the enforcement of the aforesaid fundamental rights and the petitions out of which the present appeals have arisen did not seek to enforce the orders laying down the conditions of detention but on the contrary challenged them and covertly sought to enforce the very rights which are suspended, they were clearly untenable and it was not open to the High Court of Bombay to strike down the afore said clauses of the Maharashtra Conditions of Detention Order, 1974 ignoring the weighty observations made by this Court in the State of Bombay vs Virkumar Gulabchand Shah(2) to the effect that measures which often have to be enacted hastily to meet a grave pressing national emergency in which the very existence of the State is at stake should be con strued more liberally in favour of the State than peace time legislation. Now if no person has a locus standi to move any court to challenge the conditions of detention embodied in the Maharashtra Conditions of Detention Order, 1974, or other such orders or rules, the position whereof is the same as that of the .Punjab Communist Detenus Rules, 1950, which, as held by a Constitution Bench of this Court in Maqbool Hus sain vs The State of Bombay(3) constitute a body of. self ' contained rules prescribing the conditions of the detenus ' maintenance, discipline etc. , we cannot understand how the High Courts of BOmbay and Karnataka could issue the afore said directions 'disregarding the provisions of the Act particularly sections 5 and 12(6) thereof which are mandato ry in character and the aforesaid orders which in any case appear to have been issued in the interest of the effective detention of the detenus. (1) ; = ; (2) ; at 884 (3) ; 746 The avowed object of the Act as manifest from its preamble being the conservation and augmentation of foreign exchange and the prevention of smuggling activities of considerable magnitude secretly organised and carried on which have a baneful effect on the national economy and gravely undermine the security of the State, it is essential that the contact of the detenus with the outside world should be reduced to the minimum. It is, therefore, for the State Governments who are in full possession of all material facts including the peculiar problems posed by foreign exchange and smuggling and not for the Courts who have neither the necessary knowledge of the facts nor the legal competence to regulate conditions of detention of persons including their maintenance, interviews or communi cations with others. The High Court also seem to have ignored the observa tions made by this Court in State of Maharashtra vs Prabha kar Pandurang Sanzgiri & Anr. (supra) and in A.D.M. Jabalpur vs Shivakant shukla (supra) to the effect that when a person is detained, he loses his freedom. He is no longer a free man and, therefore, he can exercise, only such privi leges as are conferred on him by the order of detention or by the rules governing his detention. We would also like to reiterate here the observations made by a Constitution Bench of this Court in Maqbool Hussain vs The State Bombay (Supra) that the mere fact that a detenu is confined in a prison for the sake of administrative conven ience does not entitled him to be treated as a civil prison er or to be governed by the provisions of the . The view of the High Court of Bombay to the contrary cannot, therefore, be sustained. It has also been contended by Mr. Seervai that in asking for their temporary removal from their places of detention to their homes to perform funeral ceremonies or to appear at any examination or to be taken to a doctor of their choice for social medical attention, the detenus are not enforcing their rights to freedom. The contention is not sound. Any relief that may be asked for through the aid of court for giving facilities to a detenu to be taken from his place of detention to his home or to an examination hall or for special medical treatment under a doctor of his choice or for any other facility would be enforcing fundamental rights through the aid of Court. The Presidential Proclamation is a complete answer against the enforcement of such reliefs through the aid of Court. The detenus may approach the competent administrative authorities for special medical attention or for facilities for performance of funeral ceremonies of their kith and kin or for facilities to appear at the examination or any other facility of similar nature. It is open to the administra tive authorities to take such action as they may be advised under the relevant provisions of the Act. But if the authorities do not give any relief it was said by counsel for the detenus then the detenus could come to the court. This contention is also unsound and unacceptable because that would also be enforcing fundamental rights through the aid and process of court which is not permissible so long as the aforesaid Proclamation is in force. 747 We are therefore clearly of opinion that the aforesaid writ petitions were not maintainable and the High Court of Bombay and Karnataka were clearly in error in passing the impugned directions which are not warranted by any relevant law including the law relating to preventive detention of the kind with which we are concerned in the present cases. The detenus or their relations may if so advised, approach the appropriate Governments. or other competent administrative authorities invoking their powers under section 5 read with section 12 of the Act or other relevant provisions thereof. In the result, appeals diarised as Nos. 3002 and 3003 of 1976 fail and are hereby dismissed while the rest of the appeals are allowed and the orders and directions forming the subject matter thereof are quashed. The special leave petitions are disposed of as infructuous as in view of our Judgment High Court Orders cannot stand. Since during the course of arguments, it was pointed out to us that the conditions of detention laid down by some State Government differ in certain particulars, we may, in conclusion, observe that the appropriate Governments would do well to take necessary steps to bring about uniformity therein. To eliminate the chances of hardship, the appro priate Governments may as well issue standing orders to meet special contingencies which necessitate expert medical aid being provided to the detenus for the maintenance of their health or their being removed temporarily from their places of detention on humanitarian grounds to enable them to perform the obsequies of their kith and kin or for appearing in some examination without detriment to the security of the State. No order as to costs. BEG, J. The circumstances in which the appeals now before us by special leave arose have been dealt with in extenso by my learned brother Jaswant Singh with whose judgment and proposed orders I entirely concur. I would, however, like to add some reasons of my own also to indicate why submissions made on behalf of the respondents, on the strength of certain observations found in the judgments, including mine, in Additional District Magistrate, Jabalpur vs Shivakant Shukla(1), decided by a Constitution Bench of this Court, cannot be accepted by us. I will also express my opinion, very briefly and broadly on some other conten tions advanced by learned counsel for the respondents as issues relating to personal liberty, which have been matters of very special and anxious concern to this Court, arise here. I think this Court has made it amply clear in Shukla 's case (supra) that the Constitution embodies, for all Courts in this country, the highest norms of law. It is the touch stone by which the validity of all action, whether executive, legislative, or judicial is to be judged. That is why, this Court has, on several occasions, spoken of "the supremacy of the Constitution" explained by me in Shukla 's case (supra) also as follows: (1) ; , 1283=[1976] Supp. S.C.R. 172. 748 "The position in this country is clearly one in which the fundamental law found in the Constitution is paramount. The Constitution provides the test for the validity of all other laws. It seeks to determine the spheres of executive and legislative and judicial powers with meticulous care and precision. The judicial function, though wider in range, when interpreting or applying other articles of the Constitution, particularly Articles 14 and 19, the enforcement of which is also suspended during the current Emergency, is especially constricted by the elaborate provi sions of Articles 21 and 22, which deal with personal liberty and preventive deten tion. The 'wider the sweep of the provisions of Articles 21 and 22, the more drastic must be the effect of suspending their enforcement. After all, suspension does not and cannot mean retention under a disguise". It seems to me that the majority view in Shukla 's Case (supra) was that there is no pre existing natural or funda mental or common law which, in so far as the rights covered by Part III of our Constitution, together with implications of such rights, are involved, is not embodied in the Consti tution itself. Furthermore, this Court held there, after considering all the relevant case law on the subject, from the case of 4. K. Gopalan vs State of Madras(1), through Kharak Singh vs State of U.P.(2), I. C. Golaknath vs State of Punjab(3), His Holiness Kesavananda Bharati Sripadagala varu vs State of Kerala(4), to Haradhan Saha vs The State 0f West Bengal & Ors. (5), that the sweep of Articles 19 and 21 is wide enough to include every aspect of personal free dom. This Court recalled that, in Kharak Singh 's case, a Constitution Bench of this Court had held that the concept of personal liberty, embodied in Article 21, is a compendi ous one and "includes all varieties of rights tO exercise of personal freedom, other than those dealt with separately by Article 19, which could fall under a broad concept of free dom of person". "It was held to include freedom from surveillance, from physical torture, and from all kinds of harassment of the person which may .interfere with his liberty". I summarised my conclusions on this sub ject in Shukla 's case (supra) as follows: "For the reasons indicated above, I hold as follows: Firstly, fundamental rights are basic aspects of rights selected from what may previously have been natural or common law rights. These basic aspects of rights are elevated to a new level of importance by the Constitution. Any (1) ; (2) [1964] (1) S.C.R. 332. (3) ; (4) [1973] Supp. S.C.R. I (5) ; 1974 S.C. 2154. 749 other co extensive rights, outside the Con stitution, are necessarily excluded by their recognition as or merger with fundamental rights. Secondly, the object of making certain general aspects of rights fundamental is to guarantee them against illegal, invasions of these rights by executive, legislative, or judicial organs of the State. This necessari ly means that these safeguards can also, be legally removed under appropriate constitu tional or statutory provisions, although their suspension does not, by itself, take away the illegalities or their legal consequences. Thirdly, Article 21 of the Constitution has to be interpreted comprehensively enough to include, together with Article 19, practi cally all aspects of personal freedom. It embraces both procedural and substantive rights. Article 22 merely makes it clear that deprivations of liberty by means of laws regulating preventive detention would be included in "procedure established by law" and indicates what that procedure should be. In that sense, it could be viewed as, substan tially, an elaboration Of what is found in Article 21, although it also goes beyond it inasmuch as it imposes limits on ordinary legislative power. Fourthly, taken by itself, Article 21 of the Constitution is primarily a protection against illegal deprivations by the executive action of the State 's agents or officials, although, read with other Articles, it could operate also as a protection against unjusti fiable legislative action purporting to authorise deprivations of personal freedom. Fifthly, the most important object of making certain basic rights fundamental by the Constitution is to make them enforceable against the State and its agencies through the Courts. Sixthly, if the protection of enforceabil ity is validly suspended for the duration of an Emergency, declared under Constitutional provisions, the Courts will have nothing before them to enforce so as to be able to afford any relief to a person who comes with a grievance before them". I may mention, at the risk of repetition, that I had explained in Shukla 's case (supra) that it is not the funda mental rights which are suspended by the Presidential Order under Article 359 of the Constitution but "the right to move any Court for the enforcement of such right by Part III as may be mentioned in the order" which is suspended for the duration of the Emergency. Speaking for myself, I was of opinion that what is very obviously and clearly affected is the enforceability of fundamental rights during such an Emergency. This means that it is really the jurisdiction of Courts, to the extent to which a petitioner seeks to enforce a fundamental right mentioned 750 in the Presidential Order, which is suspended or is in abeyance. I said there (at p. 1302) (paragraph 346): "The result is that I think that there can be no doubt whatsoever that the Presidential Order of 27th June, 1975, was a part of an unmistakably expressed intention to suspend the ordinary processes of law in those cases where persons complain of infringement of their fundamental ' rights by the executive authorities of the State". It is these processes of law, whether statutory or outside. any statute (even assuming, for the sake of argument, that there could be any such non statutory rights) which Arti cle 21 expressly protects. Therefore, I am totally unable to understand how, without ignoring what our Constitution enjoins, a Court could do what is Constitutionally prohib ited i.e. to enforce a statutory or non statutory supposed protection. Shukla 's case (supra) and other connected cases related to the enforcement of the right to personal liberty by obtaining an order of release of detenus after issuing writs of Habeas Corpus. Article 223 of the Constitution, no doubt, gives power not only to issue specified writs but enables High Courts to issue orders and directions for "any other purpose". It seems to me that this "other purpose" has to be similar to those for which one of the specified writs could issue except to the extent that each specified writ may have special features or incidents attached to it. Now, the writ of Habeas Corpus, as is well known, is wider in scope than enforcement of fundamental rights which are available against the State only and its officers and agents. Therefore, I had said in Shukla 's case (p. 1300): "The remedy by way of a writ habeas corpus is more general. It lies even against illegal detentions by private persons although not under Article 32 which is confined to en forcement of fundamental rights [vide: Smt. Viday Verma vs Dr. Shiv Narain Verma, (1955)C2 SCR 983=AIR The Attorney General also concedes that judicial proceedings for trial of accused persons would fail outside the interdict of the Presidential Order under Article 359(1). Therefore, it is unnecessary to consider hypothetical cases of illegal convictions where remedies under the ordinary law are not suspended". As already indicated above, fundamental rights are conferred and guaranteed by the Constitution so that citi zens, and, in the cases of Articles 14 and 21, even non citizens, may get relief against the State and its agencies. The suspension of enforcement of fundamental rights, which are rights enforceable against the State only, does not, as I pointed out, in Shukla 's case, debar enforcement of some right to personal freedom against a private individual by means of a writ of habeas corpus directed to him to produce a person illegally detained. But, so far as mere direc tions or orders for "any other purpose" are concerned, the jurisdiction of High Courts does not 751 extend to making orders against private individuals. There fore, the distinction which 1 drew in Shukla 's case (supra), between a detention by an officer of the State, vasted with the power to detain and purporting to act under some law which authorises him to pass a detention order, and a detention by a private individual, has no real bearing on the cases now before us. I had certainly expressed the view in Shukla 's case that, if a detention by a person or authority is not in exercise or purported exercise of a power to detain, which is not vested in all officers of State, under statutes providing for it, the action of an officer of the State, on the facts of a particular case, may be, prima facie. indistinguisha ble from a detention by a private person and may not be protected at all by the Presidential Order which only covers purported actions of the State and its Officers empowered to detain. That was, as I pointed out there, was a purely hypothetical situation not presented in any of the cases before us on that occasion. If the officer concerned is duly empowered and has passed a detention order, that order is certainly not capable of being questioned, under Article 226, either on the ground of alleged ultra vires or mala fides. All inquiry into the conditions of exercise of such power is barred under Constitutional provisions during the emergency. That was the very clearly expressed majori ty view in Shukla 's case (supra). In all the cases now before us, the application consid ered by the High Court was for grant of a direction or order against the State or its Officers, acting in the performance of their purported duties. The remedy sought against them was clearly covered by the Presidential inhibition which operates, under the Constitution, which is supreme, against the High Courts. Hence, whatever may be the grievances of the detenus, with regard to the place of their confinement, the supply of information to them, their desire to get treatment by their own private doctors or to obtain some special or additional food required by them from their own homes, or to leave the place of their confinement temporari ly to go to some other place to perform some religious ceremony or other obligation, for which they had erroneous ly sought permission and directions of the Court subject to any conditions, such as that the detenus could be accompa nied by the police or remain in the custody of the police during the period, are not matter which the High Court had any jurisdiction to consider at all. It was, therefore, quite futile to invite our attention to the allegations of petitioners about supposed conditions of their detention. Indeed, on the face of it, the nature of the claims made was such that they are essentially matters fit to be left to the discretion and good sense of the State authorities and officers. It is not possible to believe, on bare allega tions of the kind we have before us, that the State authori ties or officers will be vindictive or malicious or unrea sonable in attending to the essential needs of detenus. ' These are not matters which the High Court could consider, in petitions under Article 226 of the Constitution, whatever be the allegations made on behalf of detenus so as to induce the High Court to interfere. The High Courts can only do so under Article 226 of the 752 Constitution if they have authority or power to do it under the Constitution. Devoid of that power, the directions, which may be given by a High Court after such enquiries as it makes, would be useless as they will not be capable of enforcement at all during the Emergency under the law as we find it in our Constitution. It will be noticed that, in most of the cases before, us, the demands made by the detenus have become infructous either because they have been promptly met by the State concerned under orders of a High Court, without any attempt by the State to do anything more than to question the juris diction, quite properly, of the High Court to give such directions, or because the time to which it related has expired so that there has remained nothing more than a question of law or principle for us to be called upon to determine. I cannot help observing, having regard to some of the allegations made, that they could not be at all easily accepted by any reasonable person and may have been proved to be totally unfounded if they had been actually investi gated and tried. If the State Governments promptly met, as they seem to have done, all reasonable requests, either before or after the orders of the High Court, without questioning anything other than the power of the High Court to give the directions given it could not be readily in ferred that all the allegations are either correct or that the Governments concerned are taking any unreasonable stands. Indeed, we have been requested by the Solicitor General to indicate the lines on which requests by detenus, of the kind we now find in the cases before us should be dealt with. These are matters entirely outside the scope of our judicial functions. We cannot suggest what a comprehen sive set of rules on such subjects should be. All that we need say on such a subject is that the attitude on behalf of the State has been very reasonable and proper in this Court. And, we have no doubt that any attempt to formulate uniform rules on such matters by authorities concerned and empow ered to do so will also disclose the same reasonableness. Speaking for myself, I am inclined to suspect that a number of allegations made on behalf of the detenus have the oblique motive of partisan villification or political propa ganda for which Courts are not proper places. I would not like to make any further comments on this aspect. I would next like to make a few observations about the contention most vehemently pressed for acceptance by us by Mr. Seervai appearing on behalf of the respondents. It was that we should adjudicate upon the validity of the rules regulating conditions of detention which are being applied to the detenus. The rules and the enactments under which they have been made have been considered in the judgment of my learned brother Jaswant Singh. I do not propose to. cover the same ground afresh. I .am in complete agreement with all that my learned brother has said. I would, howev er, like to add some observations on the main ground upon which the validity of the rules is assailed. It was urged before us that rules regulating conditions of their deten tion cannot be either so made or 753 administered as to amount to punitive detention of the detenus. Reliance was placed on Haradhan Saha 's case (supra), where a Constitution Bench of this Court said (at p. 2100): "The power of preventive detention is qualitatively different from punitive deten tion. The power of preventive detention is a precautionary power exercised in reasonable anticipation. It may or may not relate to an offence. It is not a parallel proceeding. It does not overlap with prosecution even if it relies on certain facts for which prosecution may be launched or may have been launched. An order of preventive detention may be made with or without prosecution and in anticipation or after discharge or even acquittal. The pendency of prosecution is no bar to an order of preventive detention. An order of preven tive detention is also not a bar to prosecution". In Haradhan Saha 's case, this Court was concerned with indicating how preventive detention and punitive detention belong to two very different and distinct categories or could be separately classified from the point of view of article 14 of the Constitution. Their objects and social purposes may be very different in hue and quality. The procedures applicable in cases of the two types are certain ly radically different. The authorities entrusted with the power of ordering punitive and preventive detentions also act on very different principles and for very different reasons. The Constitutional justification for preventive detention was considered by this Court at some length in Shukla 's case (supra). Although preventive detention, which is constitutionally sanctioned in this country, and punitive detention may be qualitatively different and be regulated by entirely different procedures and may have very different immediate objectives, yet, if we closely examine the total effects and ultimate social purposes of detention, whether preventive or punitive, it seems to me, speaking entirely for myself, that the theoretical distinctions become less obvious. It seems to me that the broad purpose of all action which results in the detention of a person by the State or its officers must necessarily be a deprivation which could, if their effects on the detenu alone were to be considered, be not incorrectly described as "punitive". Again, "preventive" detention, like "punitive" detention, may have some therapeutic or reformative purposes behind them for the detaining authorities viewing the matters from administrative or psychological points of view necessitating some action in national interest. Some jurist, who under takes a study of the subject, may discover certain broad similarities of social purposes, side by side with the distinctions already pointed out by this Court. In Shukla 's case I indicated that the exercise of power of preventive detention during an Emergency may be viewed as a purely administrative. to use the term employed by Sir William Hordsworth. even "political" action lying in an area which is completely protected from judicial scrutiny. As we indicated in Shukla 's case, high 754 authority can be cited for such a proposition [see Liver sidge 's(1) case, and Rex vs zadiq(2)]. The result seems to me to be that the principle that the doctrine of State necessity is not available to a State against its own citizens becomes inapplicable during an Emergency, at least as a result of the suspension of enforceability of the rights of citizens under Articles 19 and 21 ,of the Consti tution. This seems to me to flow directly from the implica tions of the maxim "Salus Populi Est Supreme Lax" (regard for public welfare is. the highest law) applied by us in Shukla 's case (supra) and by English Courts in Liver sidge 's case (supra) and Zadig 's .case (supra). .This, however, does not mean that the persons detained are with out any remedy as was pointed out in Shukla 's case. The result only ' is that the remedy for all their, grievances lies, in times of Emergency, with the executive and adminis trative authorities of the State where they can take all their complaints. Here, we have to be content .with de claring the legal position that the High Courts, acting under article 226, have not been given the power to interfere in any matter involving the assertion or enforcement of a right to personal freedom by the detenus during an Emergen cy, when exercise of such power of High Courts is suspend ed. We are not concerned in these cases with other kinds of claims which may arise before the ordinary criminal or civil courts for wrongs done by officers acting maliciously in purported exercise of their powers. We are only concerned here with the powers of High Courts under article 226 of the Constitution. I have no doubt whatsoever, that if the object of a proceeding is to enforce the fundamental right to personal freedom, a High Court 's jurisdiction under article 226 is barred during an Emergency even if it involves adjudication on the question of vires of a rule made under enactments authorising preventive detention. I find it impossible to invalidate a rule either intended for or used for regulating the conditions of detention of a person detained under one of the Acts authorising preventive detention, on the ground that the rule could only be used for persons in "punitive" detention. The attack on the validity of such a rule cannot succeed on the ground that the object of the rule should be shown to be preventive and not punitive. I fail to find a reasonably practical method of distinguishing a rule which could be used for those in preventive detention under an Act authorising it from another rule which could only apply to persons in punitive detention undergoing sentences of imprisonment. These are really administrative matters with which High Courts can have no concern for the reasons given above and also in Shukla 's case (supra). Learned counsel for the detenus appear to me to be resurrecting the ghost of a "Natural law" which we thought we had laid to rest in Shukla 's case (supra). As certain arguments based on what looks like "National Law" have been advanced again before us, I may cite an instructive passage from Judge Cordozo 's "Nature Of the Judicial Process". He said: (1) ; (2) ; 755 "The law of nature is no longer conceived of as some thing static and eternal. It does not override human or positive law. It is the stuff out of which human or posi tive law is to be woven, when other sources fail. The modern philosophy of law comes in contact with the natural law philosophy in that the one as well as the other seeks to be the science of the just. But the modern philosophy of law departs essentially from the natural law philosophy in that the latter seeks a just, natural law outside of posi tive law, while the new philosophy of law desires to deduce and fix the element of the just in and out of the positive law out of what it is and of what it is becoming. 'the natural law school seeks an absolute ideal law, 'natural law '. . . by the side of which positive law has only secondary importance. The modern philosophy of law recog nizes that there is only one law, the positive law, but it seeks its ideal side, and its enduring idea. " I respectfully agree with this statement of the rela tionship between natural law and positive law today, in the application of law by courts governed by and subject to the limitations of a written Constitution such as ours. Let us, however, assume, in order to test the correctness of the proposition, that a rule of natural law, having as much force and validity as a rule of positive law embodied in a statute, has been infringed. Let us go a little further, and even assume that a rule embodied in a statute has been violated by an authority functioning under the Constitu tion in either framing or administering a rule. Can Courts, exercising powers under Article 226, declare that rule or purported action of an executive authority dealing with a detenu under the rule, or in exercise of its discre tion, to be ultra vires ? We are all aware of the dictum of Justice Holmes that "law is not logic". Nevertheless, I do not think that the Courts have the power to persue a logic of their own to overcome what the letter of the Constitution clearly prohibits. The precedents we have discussed at length in Shukla 's case indicate the declarations of law, that Articles 19 and 21 embrace every aspect of an alleged infringement of the right to personal freedom by a State authority or officer purporting to act under a law, by which we are bound, Even if the action violates a protection conferred by Article 21 upon citizens as well as non citi zens in ordinary times, yet, the result of the suspension of the protection given by Article 21 must necessarily be that the protection cannot be enforced during an Emergency. If that be the effect of the Presidential declaration under Article 359, as we declared it to be after a very anxious consideration in Shukla 's case we cannot go behind this declaration of law and the express letter of the law as embodied in our Constitution, and enforce what may be cov ered by the right to personal freedom in ordinary times whether it parades under the guise of natural law or statu tory law or Constitutional, law. This consequence seems to me to flow logically and naturally and necessarily from the whole trend of reasoning and, in any ease, from the actual declaration of law and the conclusion recorded by us in Shukla 's ease. I would, therefore, consider any 14 112SCI/77. 756 stray sentences or expressions of opinion, in our judg ments in Shukla 's case, which may, torn out of their con text, give a contrary impression, to be mere obiter dicta. For the reasons given above, as well as those given by my learned brother Jaswant Singh, I concur with the orders proposed by my learned brother.

The Conservation of Foreign Exchange and Prevention of Smuggling Activities (Maharashtra Conditions of Detention) Order, 1974 provides that security prisoners shall not be allowed to supplement their diet even at their own expense, restricts the security prisoner from receiving funds from relatives and friends; restricts the number of meetings with relatives and friends and medical attention is allowed only through the Medical Officer of the prison in the same way as a convicted criminal and so on. Writ Petitions field by the detenus under articles 226, and 227 of the Constitution, two High Courts .have struck down the Order as ultra vires. On appeal it was contended by the State that the right of a person to move. any Court for the enforcement of the rights conferred by articles 14, 19, 21 and 22 of the Constitu tion having been suspended by the Presidential Orders of June 27, 1975 and January 8, 1976 issued under article 359(1) for the period during which the Proclamation of Emergency was inforce, no person had locus Mandi to move an appli cation under article 226 for the 'issue of a writ to enforce any right to personal liberty. Allowing the appeals, (per Ray, C.J. and Jaswant Singh, J.) HELD: The Writ Petitions were not maintainable and the High Courts were clearly in error in passing the impugned directions which were not warranted by any relevant law including the law relating to preventive detention. [732 D] 1. It is well settled by the decisions of this Court that if a person was deprived of his personal liberty not under the 'Defence of India Act, 1962 or any rule or order made thereunder but in contravention thereof, his locus standi to move any court for the enforcement of the rights conferred by articles 21 and 22 was not barred. On the other hand since the Presidential Orders dated June 27, 1975 and January 8, 1976 were not circumscribed by any limitation, their applicability was not made dependent upon the fulfil ment of any conditions precedent. They imposed a total or blanket ban on the enforcement of the fundamental rights conferred by articles 19, 21 and 22. There is,therefore, no room for doubt that these Presidential Orders unconditional ly suspended the enforceability of the right conferred upon any person, including a foreigner, to move any Court for the enforcement of the rights conferred by articles 14, 19, 21 and 22 of the Constitution. [742 E, G H] Additional District Magistrate, Jabalpur vs Shiva Kant Shukla , Makhan Singh vs State of Punjab , State of Maharashtra vs Prabhakar Pandurang Sanz giri [1966] 1 S.C.R. 702 A.I.R. 1966 S.C. 424, Dr. Ram Manohar Lohia vs State of Bihar 1966 S.C. 740, A.K. Gopalan vs The State of Madras and Kharak Singh vs State of U.P. [1964] 1 S.C.R. 332 A.I.R. 1963 S.C. 1295, followed, 720 2. When a person has no locus standi to move any Court to challenge his order of detention, the High Court could not issue directions disregarding the provisions of the Act, which is a self contained code, and particularly sections 5 and 12(6) which are mandatory. [745 F H] Maqbool Hussain vs The State of Bombay ; , followed. As Articles 19, 21 and 22 of the Constitution have been suspended during the operation of the Proclamation of Emergency, the Conservation of Foreign Exchange and Preven tion of Smuggling Activities Act and the orders made or passed thereunder were not open to challenge on the ground of their being inconsistent with or repugnant to articles 14, 19, 21 and 22 of the Constitution in view of the Presiden tial Orders, dated June 27, 1975 and January 8, 1976. [742 G H] In the instant case the detenus covertly sought to enforce the vary rights which were suspended. It was not open to the High Courts to strike down the impugned clauses of the Maharashtra Conditions of Detention Order 1974. The avowed object of the Act, as mainrest from its preamble, being the conservation and augmentation of foreign exchange and the prevention of smuggling activities secretly organised and carried on, it is essential that contact 0f the detenus with the outside world should be reduced to the minimum. It is for the State Governments who are in full possession of all material facts and not for the Courts who have neither the necessary knowledge of the facts nor the. legal competence, to regulate conditions of detention Of persons, including their maintenance, interviews or communi cations with others. [746 A C] 5. When a person is detailed, he can exercise only such privileges as are conferred on him by the order of detention or by the rules governing his detention. State of Maharashtra vs Prabhakar Pandurang Sanzgiri [1966] I SCR 702AIR 1966 S.C. 424 referred to. The mere fact that a detenu is confined in a prison for the sake of administrative convenience does not entitle him to be treated as a civil prisoner or to be governed by the provisions of the Prisons Act. The view of the High Courts to the contrary cannot be sustained. [746 D E] Maqbool Hussatn vs The State of Bombay ; , followed. The contention that the Presidential Orders did not bar the Court from examining the vires of the detention orders because what was sought to be enforced was not a right of personal liberty but a redress against unreasona bleness of the order was misconceived. The Presidential Orders imposed a blanket ban on every judicial enquiry into the validity of an order depriving a person of his personal liberty irrespective of whether it stems from the initial order directing his detention or from an order laying down the conditions in his detention. [743 A E] Additional District Magistrate, .Jabalpur vs Shiva Kant Shukla followed. (Per Beg. J.) Concurring. 721 The High Courts, acting under article 226 have not been given the power to interfere in any matter involving the assertion or enforcement of a right to personal freedom by the detenus during an Emergency, when exercise of such power by the High Courts is suspended. In times of Emergency the remedy for all the grievances of the detenus lies with the executive and administrative authorities of the State. [754 B C] 1. Shukla 's case held that 'it was not the fundamental rights which were suspended by the Presidential Order under article 359 but the right to move any Court for the enforcement of such right conferred by Part III as may be mentioned in the Order which is suspended for the duration of_the Emer gency. This mean that it is the 'jurisdiction of Courts, to the extent to which a petitioner seeks to enforce the funda mental rights mentioned in the Presidential Order, which is suspended. [749 G H] Additional District Magistrate, Jabalpur vs Shivakant Shukla AIR 1976 SC 1283, applied. A.K. Gopalan vs State of Madras, ; , Kharak Singh vs State of U.P., [1964] 1 SCR 332, 1. C. Golakanath vs State of Punjab ; His Holiness Kesavananda Bharati Sripadagalavaru vs State of Kerala, [1973] Supp. SCR 1 and Haradhan Saha vs The State of West Bengal & Ors., [1975] (1) SCR 778 AIR 1974 SCR 154 referred to. The term "any other purpose" in article 226 means pur poses similar to those for which one of the specified writs would issue subject to certain exceptions The writ of habeas corpus is wider in scope than the enfrocement of fundamen tal rights which are available against the State only and its officers and agents. But so far as mere directions or orders for any other purpose are concerned, the jurisdiction of High Courts does not extend to making orders against private individuals. On the other hand, if an officer is duly empowered and has passed a detention order, that order is not capable of being questioned under article 226. All enquiry into the conditions of exercise of such. power is barred under the constitutional provisions during the emer gency. [750 D E, H, 751 A, C D] 3. In the instant case the remedy sought was clearly covered by the Presidential inhibition which operates against the High Courts. The claims made by the detenus were not matters which the High Court could consider in petition under article 226 of the Constitution. [751 E F] 4. If the object of a proceeding is to enforce the fundamental right, to personal freedom, a High Court 's jurisdiction under article 226 is barred during an Emergency even if it involved adjudication on the question of vires of a rule made under enactments authorising preventive deten tion. It is impossible to invalidate a rule either intended for or used for regulating the conditions of detention of a person detained under one of the Acts authorising preven tive detention on the ground that the rule could only be used for persons in punitive detention. The attack on the validity of such a rule cannot succeed on the ground that the object of the rule should be shown to be preventive and not punitive. [754 E F] 5. Shukla 's case indicates that articles 19 and 21 embrace every aspect of an alleged infringement of the right of personal freedom by a State authority or officer purporting to act under a law. Even if the action violates, a protec tion conferred by article 21 upon citizens as well as non citizens in ordinary times, the result of the suspension, of the protection given by article 21 must necessarily be that the protection cannot be enforced during an Emergency. If that be the effect of the Presidential declaration under article 359, the Court cannot go behind this declaration of law and the express letter of the law as embodied in the Constitu tion and enforce what may be covered by the right to person al freedom in ordinary times whether it parades under the guise of natural law or statutory law or constitutional law. [755 F H] 722

ivil Appeal No. 2123 of 1991. From the Judgment and Order dated 20.12.1988 of the Bombay High Court in Appeal No. 1649 of 1988. WITH WRIT PETITION NO. 1287 OF 1989. (Under Article 32 of the Constitution of India). Rajinder Sachhar, R.K. Agnihotri and S.C. Paul for the Appellant/Petitioner. K.N. Bhat, Vineet Kumar, Lalit Bhasin and Ms. Nina Gupta for the Respondents. The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. Nagaraj Shivarao Karjagi, the petitioner in SLP No. 4415 of 1989 has challenged his compulsory retirement and in Writ Petition No. 1287 of 1989 he has questioned the validity of the direction dated 21 July 1984 issued by the Finance Ministry, Government of India. Since the questions raised in both the cases are inter looked, we grant special leave in the SLP and proceed to dispose of the same along with the writ petition. The events leading to these cases may briefly be stated. In 1982, the petitioner was a Manager of the Syndicate Bank (`the Bank ') at East Patel Nagar Branch at New Delhi. He discounted a cheque of the sum of Rs. 50,000 drawn on Punjab National Bank, Madras, after obtaining, by phone prior approval of the Regional Divisional Manager of the Bank. The cheque was sent for realisation to the Punjab National Bank at Madras, but it was returned unpaid. The petitioner did not take prompt action to recover the amount from the person in whose favour he discounted the cheque. He kept the cheque 580 with him even without reporting to the higher authorities. In 1983, the Assistant General Manager of the Bank called upon him to explain why the amount due under the discounted cheque has not been recovered. The petitioner in his reply explained the circumstances under which the cheque was discounted. He has stated that the credit was given to the account of one Dr. N. Ramakrishnan who was a Senoir Scientist in Indian `Agricultural Research Institute, New Delhi but the amount was withdrawn by another person called A. Chandrashekhar who is an officer of the Bank. He has further stated that A. Chandrashekhar has promised to pay the amount and therefore, he has retained the instrument with him hoping that A. Chandrashekhar would keep up his promise. On 6 July 1984 a sum of Rs.52,167.15 was deposited with the Bank. A sum of Rs.36,000 towards principal sum and Rs.16,167.15 towards interest. A suit was filed to recover a sum of Rs.14,000 out of the principal amount. And later on, this principal amount was also recovered and credited to the Bank. However, in 1985 there was a departmental inquiry against the petitioner. The Commissioner for Vigilance Inquiry from the Central Vigilance Commission conducted the inquiry. The first charge against the petitioner was that when he was functioning as Manager, he discounted under his discretionary jurisdiction a cheque for Rs.50,000 drawn in the name of Dr. N. Ramakrishnan in order to accommodate A. Chandrashekhar an officer of the Bank or others known to him. The second charge framed against him, related to the retention of the discounted instrument with him from December, 1982 till January 1984 without taking/causing to be taken any action to realise the amount due under the unpaid cheque. It was also alleged that the petitioner made available undue financial accommodation to A. Chandrashekhar or others to the detriment of the interests of the Bank. He was charged with lack of the integrity, honesty devotion to duty, diligence and conduct unbecoming of the status of Bank Officer in contravention of Regulation No. 3(1) of the Syndicate Bank Officer Employees ' (Conduct) Regulations, 1976. The inquiry was held as per the procedure prescribed by Syndicate Bank Officer Employees ' (Discipline & Appeal) Regulations, 1976, (`the Regulations '). On 16 October 1986, the Inquiry Officer submitted his report holding that the charges were proved against the petitioner. He has held that the petitioner has failed to take any effective steps for recovery of the amount paid under the discounted instrument. He has kept the instrument with himself for unduly long period without even surrendering the same to the custody of the Bank. It was 581 Only after the Additional General Manager reminded him by letter dated 15 December 1983, the petitioner assured him that he would return the cheque which he finally did on 18 January 1984. The Inquiry Officer has finally concluded that the transaction connected with the unpaid instrument was of an accommodative nature with a view to assist A. Chandrashekhar by using another person as benami and it was in clear violation of the rules of the Bank. It is said and indeed not disputed that the Bank referred the matter to the Central Vigilance Commission for advice and the Commission has recommended that the petitioner may be compulsorily retired from service by way of punishment. The disciplinary authority after considering the inquiry report and affording an opportunity to the petitioner passed an order dated 7 October 1987 imposing on the petitioner the penalty of compulsory retirement. The petitioner appealed to the General Manager challenging the punishment. On 27 August 1988 the General Manager dismissed the appeal concurring with the findings recorded and the punishment imposed by the disciplinary authority. The petitioner thereupon moved the Bombay High Court for relief under Article 226 of the Constitution. The High Court has also dismissed the writ petition. He has now appealed to this Court. before us that the punishing authorities did not apply their mind and did not exercise their power in considering the merits of his case. They have imposed on him the penalty of compulsory retirement in obedience to the advice of the Central Vigilance Commission which has been made binding on them by the direction dated 21 July 1984 issued by the Ministry of Finance, Department of Economic Affairs (Banking Division). They have blindly followed the advice given by the Central Vigilance Commission without regard to the merits of the matter and contrary to the statutory Regulations governing the departmental inquiries. The subject matter of inquiry was only regarding irregularities in the banking practice and the action complained of has not affected the interests of the Bank. The petitioner by his own efforts has recovered the money due under the discounted cheque and credited the same with interest to the Bank. The findings recorded by the Inquiry Officer on the alleged misdemeanour does not warrant any major penalty like the compulsory retirement. Reference was also 582 made to certain representations said to have been made by the Bank to the Central Vigilance Commission for approval to impose a lesser punishment. It is said that the Bank pleaded in the representations that the punishment of compulsory retirement advised by the Commission was too harsh. SYNDICATE BANK OFFICER EMPLOYEES ' (DISCIPLINE AND APPEAL) REGULATION 1976 These Regulation have been framed under Section 19 of the Banking Companies (Acquisition and Transfer Undertakings) Act, 1970. They were framed by the Board of Directors of the Syndicate Bank in consultation with the Reserve Bank of India and with the previous sanction of the Central Government. Regulation 4 prescribes penalties for acts of misconduct. Regulation 5 specifies the authority to institute disciplinary proceedings and impose penalties. Regulation 6 lays down procedure for imposing major penalties and Regulation 7 provides for action on the inquiry report. Regulation 7 confers power to the disciplinary authority either to agree or disagree with the findings of the inquiry authority on any article of charge. The disciplinary authority may reach its own conclusion on the material on record and impose any penalty prescribed under Regulation 4. Or if it is of the opinion that no penalty should be imposed on the delinquent officer, it may pass an order exonerating the delinquent officer. Regulation 17 provides for appeals against the order imposing any of the penalties specified in Regulation 4. The appellate authority has been given the power to pass any order of penalty or remitting the case to the disciplinary authority or to any other authority for fresh disposal. Regulation 19 provides for consultation with the Central Vigilance Commission. It states that "that the Bank shall consult the Central Vigilance Commission wherever necessary, in respect of all disciplinary cases having a vigilance angle. " There is no other Regulation requiring consultation with Central Vigilance Commission, or providing that the advice given by the Commission is binding on the punishing authorities. The Central Vigilance Commission, however, appears to have framed guidelines for Banks to consult the Commission in respect of cases where major penalty is prescribed under the Regulation. Article 22 of the Central Vigilance Commission Manual reads : "The Scheme of consultation with the Commission in respect of major penalty cases pertaining to such officers envisages consultation with the Commission at two stages. 583 The first stage of consultation arises when initiating disciplinary proceedings while the second consultation is taken at the conclusion of the proceedings. " Article 23.2 of the C.V.C. Manual Chapter 10 reads: "In all cases where C.V.C. advises initiation of major penalty proceedings, it also nominates simultaneously a Commissioner for Departmental Inquiries to whom the inquiry should be entrusted." THE DIRECTION OF THE MINISTRY OF FINANCE, DEPARTMENT OF ECONOMIC AFFAIRS (BANKING DIVISION) On 21 July 1984 Joint Secretary, Ministry of Finance, Department of Economic Affairs (Banking Division) has written a letter to all Banking Institution thus : "Recently a case been reported where a bank has revised the punishment awarded to an officer in a disciplinary case contrary to the advice of the Central Vigilance Commission. The case has figured in the Annual Report of the CVC as a case of non consultation with the Commission and thus created an embarrassing situation. You will, perhaps, be aware of the Annual Reports of the CVC, which contain cases where the disciplinary authorities had not accepted its recommendations or had not consulted it, are laid on the Tables of both the Houses of Parliament. This may, thereafter be discussed in the Parliament also. You will agree that under no circumstances the advice of the CVC should be modified except with the prior concurrence of the commission and this Ministry. I may mention here that revision of the penalty imposed on a delinquent officer as a result of an appeal filed by him before the appellate authority against the decision of the original disciplinary authority also amounts to non consultation/non acceptance of the advice of the CVC and is included in CVC 's Annual Report. Kindly circulate these instructions to the concerned officers in your bank for strict compliance. The receipt of this D.O. letter may please be acknowledged. A copy of this D.O. letter is being marked to CVO in your bank separately. " 584 CIRCULARS OF THE BANK On 27 July 1984, A. Krishna Rao, Chairman and managing Director of the Bank, issued a circular to all branches of the Bank as follows : "I am enclosing herewith a photostat copy of the DO letter No.41/3/84 Vig. dated 21.7.1984 received by me from Shri Ashok Kumar, joint Secretary, ministry of Finance, Department of Economic Affairs, (Banking Division), Vigilance Cell, New Delhi, in the above connection for strict compliance of the instructions contained therein. As the advice in vigilance cases received from Central Vigilance commission is communicated to the authorities concerned by the Chief Vigilance Officer, I advise, that the Chief Vigilance Officer 's advice, as explained in my above referred to DO letter, should be complied with. Even when a revision of the penalty imposed on a delinquent officer at the advice of the Chief Vigilance Officer by of Original Disciplinary Authority were to be considered as a result of an appeal filed by him before the appellate/high authorities, such revision shall be effected only after consulting the Chief Vigilance Officer. Please acknowledge receipt of this and ensure compliance of the instructions contained herein. " On 8 September 1986 P.S.V. Mallya, the succeeding Chairman and Managing Director of the bank issued another circular letter to all branches of the bank in the following terms: "All vigilance cases in bank are being investigated/ processed at Vigilance Cell at the HO, under the administrative control of the Chief Vigilance Officer, who is reporting directly to me. After processing of the reports is concluded, the cases are referred to Central Vigilance Commission as per the existing procedure and the advice received from the commission is being communicated to the Disciplinary/Appellate Authority by the Chief Vigilance Officer. 585 If the advice tendered by the Commission is not accepted/acted upon, it will amount to non acceptance of the advice of the Commission and such instance will figure in the Annual Report of the Central Vigilance Commission placed before the Parliament. This apart the non acceptance of the advice in vigilance cases is likely to lead to a situation, in which, different types of decisions are possible to be taken in similar cases, which is sure to result in a voidable complications and injustice to certain sections of the Officers/employees community. Again in such a situation, ensuring uniform stantards in finalising action on vigilance cases will also become a very difficult phenomenon, which is not a desirable trend and does not augur well for the healthy functioning of the vigilance machinery in the Bank. I therefore, advice all Disciplinary /Appellate Authorities to see that they refer as hitherto all vigilance cases to Chief Vigilance Officer and consult him on such cases and act upon his advice. xxxxx xxxxx xxxxx xxxxx If for any reasons, the authorities concerned feel that the advice needs to be reconsidered or a departure is called for, they may refer back the matter to Chief Vigilance Officer for reconsideration of the advice, with the reasons for such disagreement and the Chief Vigilance Officer will see whether and to what extent such reconsideration is desirable or feasible and will tender advice again on reconsideration. If the authority concerned is still not disposed to act on the advice, the disinclination on the part of the authority concerned will have to be brought to my notice and the advice given by me in respect of such cases shall be treated as final. It is also necessary that the authorities concerned should for obvious reasons keep the advice in strict confidence and see that no reference thereof is made in any of the correspondence communication, whether emanating from their end. " 586 The petitioner being aware of the directions of the Ministry of Finance and the circulars issued by the Bank has in his memo of appeal before the appellate authority inter alia complained that the system and procedure adopted by the Bank in dealing with vigilance cases, is totally against the principles of natural justice. The Bank has no control over such cases. The Disciplinary Authority and Appellate Authority are required to carry into effect the punishment advised by the Central Vigilance commission without change. He has also pointed out that his appeal could be nothing but an empty formality as the appellate authority would be also bound by the decision of the Central Vigilance commission. The petitioner has also added post script to his appeal Memo stating thus "This appeal has been filed without prejudice to my contention that this appeal is an exercise in futility as the appellate authority also is not the deciding authority and this appeal also will be decided by the CVO/CVC, who has already decided and whose decision is binding on you. There is in fact no effective right of appeal. " Counsel for the Bank however, submits that notwithstanding the advice of the Central Vigilance Commission and the directive dated 21 July 1984 of the Ministry Finance, Department of Economy Affairs (Banking Division), the case of the petitioner has received the fullest consideration from the disciplinary and appellate authorities. They have independently considered the material on record both on the articles of charges and also on the appropriate punishment of compulsory retirement imposed on the petitioner. The orders of the authorities do not refer to the circulars of the Bank, nor to the punishment proposed by the Central Vigilance Commission. It is therefore, illegitimate, to contend that the punishment imposed on the petitioner has been vitiated by extraneous influences. We are not even remotely impressed by the arguments of counsel for the Bank. Firstly, the Bank itself seems to have felt as alleged by the petitioner and not denied by the Bank in its counter that the compulsory retirement recommended by the Central Vigilance Commission was too harsh and excessive on the petitioner in view of his excellent performance and unblemished antecedent service. The Bank appears to have made two representations; one in 1986 and another in 1987 to the Central Vigilance Commission for taking a lenient view of the matter and to advise lesser punishment to the petitioner. Apparently, those representations were not accepted by the Commission. The disciplinary authority and the appellate authority therefore have no choice in the matter. They had to impose the punishment of com 587 puslory retirement as advised by the Central Vigilance Commission. The advice was binding on the authorities in view of the said directive of the Ministry of Finance, followed by two circulars issued by the successive Chief Executive of the Bank. The disciplinary and appellate authorities might not have referred to the directive of the Ministry of Finance or the Bank circulars. They might not have stated in their orders that they were bound by the punishment proposed by the Central Vililance Commission. But it is reasonably foreseeable and needs no elaboration that they could not have ignored the advice of the Commission. They could not have imposed a lesser punishment without the concurrence of the Commission. Indeed, they could have ignored the advice of the Commission and imposed a lesser punishment only at their peril. The power of the punishing authorities in departmental proceedings is regulated by the statutory Regulations. Regulation 4 merely prescribes diverse punishment which may be imposed upon delinquent officers. Regulation 4 does not provide specific punishments for different misdemeanours except classifying the punishments as minor or major. Regulations leave it to the discretion of the punishing authority to select the appropriate punishment having regard to the gravity of the misconduct proved in the case. Under Regulation 17, the appellate authority may pass an order confirming, enhancing, reducing or completely setting aside the penalty imposed by the disciplinary authority. He has also power to express his own views on the merits of the matter and impose any appropriate punishment on the delinquent officer. It is quasi judicial power and is unrestricted. But it has been completely fettered by the direction issued by the Ministry of Finance. The Bank has been told that the punishment advised by the Central Vigilance Commission in every case of disciplinary proceedings should be strictly adhered to and not to be altered without prior concurrence of the Central Vigilance Commission and the Ministry of Finance. We are indeed surprised to see the impugned directive issued by the Ministry of Finance, Department of Economic Affairs (Banking Division). Firstly, under the Regulation, the Bank 's consultation with Central Vigilance Commission in every case is not mandatory. Regulation 20 provides that the Bank shall consult the Central Vigilance Commission wherever necessary, in respect of all disciplinary cases having a vigilance angle. Even if the Bank has made a self imposed rule to consult the Central Vigilance Commission in every disciplinary matter, it does not make the Commission 's advice binding on the punishing authority. In this context, reference may be made to Article 588 320(3) of the Constitution. The Article 320 (3) like Regulation 20 with which we are concerned provides that the Union Public Service Commission or the State Public Commission, as the case may be, shall be consulted on all disciplinary matters affecting a civil servant including memorials or petitions relating to such matters. This Court in A.N. D 'Silva vs Union of India, [1962] Suppl; 1 SCR 968 has expresed the view that the Commission 's function is purely advisory. It is not an appellate authority over the inquiry officer or the disciplinary authority. The advice tendered by the Commission is not binding on the Government. Similarly, in the present case, the advice tendered by the Central Vigilance Commission is not binding on the Bank or the punishing authority. It is not obligatory upon the punishing authority to accept the advice of the Central Vigilance Commission. Secondly, the Ministry of Finance, Government of India has no jurisdiction to issue the impugned directive to Banking institutions. The government may regulate the Banking institutions within the power located under the banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. So far as we could see, Section 8 is the only provision which empowers to the Government to issue directions. Section 8 reads: "Every corresponding new bank shall, in the discharge of its function, be guided by such directions in regard to matters of policy involving public interest as the Central Government may, after consultation with the Governor of the Reserve bank, give." The corresponding new bank referred to in Section 8 has been defined under Section 2(f) of the Act to mean a banking company specified in column 1 of the First Schedule of the Act and includes the Syndicate Bank. Section 8 empowers the Government to issue direction in regard to matters of policy but there cannot be any uniform policy with regard to different disciplinary matters and much less there could be any policy in awarding punishment to the delinquent officers in different cases. The punishment to be imposed whether minor or major depends upon the nature of every case and the gravity of the misconduct proved. the authorities have to exercise their judicial discretion having regard to the facts and circumstances of each case. They cannot act under the dictation of the Central Vigilance Commission or of the Central Government. No third party like the Central Vigilance Commission or the Central Government could dictate the disciplinary authority or the appellate authority as to how they should exercise 589 their power and what punishment they should impose on the delinquent officer. (See: De Smith 's Judicial Review of Administrative Action, Fourth Edition, p. 309). The impugned directive of the Ministry of Finance, is therefore, wholly without jurisdiction, and plainly contrary to the statutory Regulations governing disciplinary matters. For the foregoing reasons, we allow the appeal and the writ petition quashing the directive issued by the Finance Ministry, Department of Economic Affairs, (Banking Division) dated 21 July 1984. We also issue a direction to the Chairman of the Syndicate Bank to withdraw the circular letters dated 27 July 1984 and 8 September 1986. We further set aside the impugned orders of the disciplinary authority and appellate authority with a direction to the former to dispose of the petitioner 's case in accordance with law and in the light of the observation made. The petitioner is entitled to costs which we quantify in both the cases at Rs. 15,000 which shall be paid by the Central Government. G.N. Appeal and petition allowed.

The appellant was a Manager in one of the branches of the Respondent Bank. In 1985, there was a departmental enquiry against him on the charges that he discounted a cheque for Rs.50,000 drawn in the name of some other person to accommodate one of his colleagues and when the cheque returned unpaid, he retained the same for about two months without taking action for realisation of the amount. An enquiry was conducted by the Commissioner for Vigilance Inquiry from the Central Vigilance Commission, following the procedure prescribed by the Syndicate Bank Officer Employees ' (Disciplinary & Appeal) Regulations. The Inquiry Officer submitted his report holding that the charges were proved against the appellant. The Respondent Bank referred the matter to the Central Vigilance Commission for advice and the Commission recommended the punishment of compulsory retirement. After considering the Inquiry Report and after affording opportunity to the appellant, the Disciplinary Authority imposed on him the 577 penalty of compulsory retirement. On appeal, the appellate authority concurred with the findings recorded and the punishment imposed. The appellant filed a Writ Petition before the High Court challenging the order of his compulsory retirement. The High Court declined to interfere with the order. Hence the present appeal, by special leave. The appellant also filed a Writ Petition before this Court challenging the validity of the direction dated 21.7.1984 issued by the Finance Ministry, following which the Respondent Bank has imposed on him the penalty of compulsory retirement. On behalf of the appellant/petitioner it was contended that the advice given by the Central Vigilance Commission was blindly followed by the Respondent Bank as it was made binding on it by virtue of the directions dated 21.7.84 issued by the Ministry of Finance and in that process the merits of the case and the statutory regulations governing departmental inquiries were ignored. It was also contended that the subject matter of the inquiry was only regarding irregularities in banking practice and since the interest of the Bank was not affected as he had the money recovered and credited to the Bank with interest thereon, the alleged misdemeanour did not warrant any major penalty like compulsory retirement, which even according to the Respondent Bank, was too harsh. On behalf of the Respondent Bank it was contended that it had independently considered the material on record notwithstanding the advice given by the Central Vigilance Commission and since the orders did not refer to the circulars or to the advice of Central Vigilance Commission, the punishment imposed on the appellant/petitioner was not vitiated by extraneous influences. Allowing the matters, this Court HELD: 1. The Respondent Bank itself felt that the compulsory retirement recommended by the Central Vigilance Commission was too harsh and excessive on the appellant/petitioner in view of his excellent performance and unblemished antecedent service. The Bank made two representations, one in 1986 and another in 1987 to the Central Vigilance Commission for taking a lenient view of the matter and to advise lesser punishment. Apparently, those representations were not accepted by the Commission. The disciplinary authority and the appellate authority therefore had no choice in the matter. They had to impose the punishment of compulsory retirement as advised by the Central Vigi 578 lance Commission. The advice was binding on the authorities in view of the directive of the Ministry of Finance issued on 21.7.1984, followed by two circulars issued by the successive Chief Executives of the Bank. The disciplinary and appellate authorities might not have referred to the directive of the Ministry of Finance or the Bank circulars. They might not have stated in their orders that they were bound by the punishment proposed by the Central Vigilance Commission. But it is reasonably foreseeable and needs no elaboration that they could not have ignored the advice of the Commission. They could not have imposed a lesser punishment without the concurrence of the Commission. Indeed, they could have ignored the advice of the Commission and imposed a lesser punishment only at their peril. [586F H; 587 A C] 2.1 But for the Finance Ministry 's directive dated 21.7.1984, the advice tendered by the Central Vigilance Commission is not binding on the Bank or the punishment authority; it is not obligatory upon the punishing authority to accept the advice of the Central Vigilance Commission. [588C] 2.2 The Ministry of Finance has no jurisdiction to issue such a directive to Banking institutions. The Government may regulate the Banking institutions within the power located under the . Even though Section 8 thereof empowers the Government to issue directions in regard to matters of policy, there cannot be any uniform policy with regard to different disciplinary matters and much less there could be any policy in awarding punishment to the delinquent officers in different cases. The punishment to be imposed depends upon the nature of every case and the gravity of the misconduct proved. The authorities have to exercise their judicial discretion having regard to the facts and circumstances of each case. They cannot act under the dictation of the Central Vigilance Commission or of the Central Government in the exercise of their power and the imposition of punishment on the delinquent officer. Therefore the directive of the Ministry of Finance is wholly without jurisdiction and contrary to the statutory Regulations governing disciplinary matters and is quashed. [588D H; 589A] A.N.D 'silva vs Union of India, [1962] Suppl. S.C.R. 968, relied on. De Smith 's Judicial Review of Administrative Action, 4th Edn. p. 309, referred to. 579 3. the Chairman of the Respondent Bank is directed to withdraw the circular letters dated 27.7.1984 and 8.9.1986 issued in furtherance of the Finance Ministry 's directive dated 21.7.1984. [589C] [Setting aside the orders of the disciplinary authority and the appellate authority, this Court directed the disciplinary authority to dispose of the case in accordance with law and observations made in the judgment.]

vil Appeal Nos. 1052 53 of 1990. 90 From the Judgment and Order dated 4,7.1986 of the Orissa High Court in OJC. 1007 and 1008 of 1983. A.K. Panda for the Appellants. Kundan Lal Jagga and K.K. Gupta for the Respondents. The following Order of the Court was delivered: ORDER Special leave granted. Agruments heard. These two appeals on special leave arise out of the common judgment of the High Court of Orissa made in O.J.C. Nos. 1007 and 1008 of 1983 decided on July 4, 1986 whereby the High Court set aside and quashed the impugned orders made by the Special Officer, Land Reforms, Central Division, Cuttack in O.L.R. Revision No. 131 of 1982 as well as O.L.R. No. 142 of 1982. The matrix of the case in O.J.C. No. 1007 of 1983 is that on July 30, 1977, the respondent No. 2, Paramanand Sethi filed case No. 85 of 1977 under section 22 of the Orissa Land Reforms Act, against S/Shri B. Mohapatra, Pra fulla Kumar Pati and Gadadhar Pati (Respondent Nos. 1, 3 and 4) for restoration of lands sold to respondent Nos. 1, 3 and 4 on the ground that respondent No. 2 was a member of the Scheduled Caste (Dhoba Community) and the sales in question were hit by the provisions contained in section 22 of the Orissa Land Reforms Act, 1960. The respondent No. 2 filed a caste certificate of the Additional Tehasildar, Betanoti wherein the respondent No. 2 was shown as belonging to 'Dhoba ' by caste which is recognised as a Scheduled Caste. He also filed the record of rights in the name of Arjun Sethi, father of respondent No. 2 which showed the caste of Arjun Sethi as 'Dhoba '. The respondent No. 5, Smt. Nilamani Sethi, wife of Late Bhanu Sethi also filed O.L.R. Misc. Case No. 21 of 1979 under Section 22 of the Orissa Land Reforms Act stating inter alia that the sale made by her in favour of respondent No. 1 who admittedly belonged to Brahmin Caste is void as the said sale was made without the permission of the Revenue Officer as mandatorily required under the provisions of the aid Act. She produced the Caste certificate issued by tile Tehasildar, Betanoti which showed that she belonged to 'Dhoba ' caste 91 which is recognised as a scheduled caste. She further filed two caste certificates issued by the two M.L.As. which certified that she belonged to a scheduled caste, (Dhoba). The Revenue Officer, vide his order dated March 19, 1979 rejected the case No. 85 of 1977 filed by the respondent No. Paramanand Sethi. The respondent No. 2 filed O.L.R. Appeal No. of 1979 in the court of Additional District Magistrate, Mayutbhanj and the same was allowed vide judgment and order dated December 1980. The Additional District Magistrate while allowing the appeal observed as follows: "It is a known fact that there is no community called 'Raj aka ' community which is different from Dhoba community. Rajaka is only a literary word for the common term Dhoba. While mentioning his caste as 'Rajaka ' the appellant has not ceased to be a 'Dhoba '. The certificate given by the Addl. Tehasildar, Betanoti and the entry in the R.O.R. confirm the assertion of the petitioner that he is a Dhoba by caste. In the circumstances, the petitioner must be held to be a S.C, person and for that matter, his brothers and mother are also the members of a S,C, According to Section 22 of the Orissa Land Reforms Act previous permission from the Revenue Offi cer should have been obtained by them before transferring their lands to the respondents. Since this statutory re quirement has not been met, the transfers are illegal. The suit land must, therefore, be restored to the transferors. " Against the said judgment and order, the respondent No. 1 filed O.L.R. Revision No. 131 of 1982 before the Special Officer, Land Reforms, Central Division, Cuttack, The said Revision Case was dismissed vide judgment and order dated March 4, 1983 on the finding that there were records of competent authorities like Addl. Tehasildar, Betanoti and the record of rights showing that the caste of Paramanand Sethi is 'Dhoba '. it has been further observed that: "As per the Oriya Bhasakosha the definition of 'Dhoba ' is 'Rajaka Washerman '. Hence, there is no conflict regarding what is the meaning of 'Rajaka '. It is merely a synonym of the word 'Dhoba '. The Sanskrit lot 'Dhoba ' is 'Rajaka '. Just because the word 'Rajaka ' does not find mention in the Presidential Order does not exclude it from the purview 92 of such an order. 'Dhobas ' are Scheduled Castes and 'Rajaka ' is a synonym of 'Dhoba '. Now, that the High Court has so eloquently laid down the law in this regard, there is no reason to deny protection to the weaker sections on a mere technicality. 'This denial would be contrary to the spirit of the Orissa Land Reforms Act, itself." O.L.R. Misc. Case No. 21 of 1979 filed by the respondent No. 5, Smt. Nilamani Sethi was allowed vide order dated March 10, 1980 by the Revenue Officer directing the restora tion of the suit lands to respondent No. 5 under Section 23 of the Orissa Land Reforms Act. The respondent No. 1 filed O.L.R. Appeal No. 42 of 1980 in the Court of Additional District Magistrate, Mayurbhanj. 'The said appeal was dis missed vide judgment and order dated February 21, 1981 holding that the transferor had amply proved that she was Dhoba which is a Scheduled Caste by producing documentary evidence. She, therefore, does not cease to be a Dhoba even if she has described herself in the various deeds as Rajaka. Since the transfer of the suit lands had been made to the respondent No. 1, Prafulla Kumar Pati who is a brahmin by caste without obtaining prior written permission of the Revenue Officer as required under Section 22 of the Orissa Land Reforms Act, the transactions had been rightly declared as void by the Revenue Officer. 'The suit lands must there fore, be restored to the possession of the respondent No. 5. Against this order, respondent No. 1 filed O.L.R. Revi sion No. 142 of 1982 before the Special Officer, Land Re forms, Central Division, Cuttack and the same was dismissed vide judgment and order dated February 2, 1983. The respondent No. 1 thereafter filed two writ petitions called O.J.C. Nos. 1007 and 1008 of 1983 against the judg ments and orders dated March 4, 1983 and February 2, 1983 respectively passed by the Special Officer, Land Reforms, Central Division, Cuttack. Both these writ petitions were heard and disposed of by a common judgment impugned in these two appeals on special leave whereby the High Court, Orissa set aside and quashed the judgments and orders passed by the Special Officer, I.and Reforms, Central Division, Cuttack and allowed the writ petitions observing inter alia that: "Considering the cases in hand in the light of the above discussions, I have no hesitation to come to the conclusion that the Revenue Authorities have committed a serious 93 error of law in coming to the conclusion that 'Rajaka ' caste was included within the notified caste/community of 'Dhoba ' as their nature of work was similar. Although it is unneces sary to make any further discussion, I must point out that even on a reference to the Bhashakosha it could not be categorically said that 'Rajaka ' was a caste which could not be said to be a class of washerman as the Bhashakosha itself gives other meanings of this word. " Against this judgment and order, the instant appeals on special leave have been filed. Before proceeding to decide the question whether the respondent Nos. 2 and 5, the trans ferors belonged to the scheduled caste Dhoba Community as mentioned in item No. 26 of the List of Scheduled Castes in the Scheduled Caste Order, 1950 in the State of Orissa, it is relevant to refer to the provisions of Section 22 and Section 23 of the Orissa Land ,Reforms Act, 1960 (Orissa Act 16 of 1960): Section 22: Restriction on alienation of land by Scheduled 'Tribes. (1) Any transfer of a holding or part thereof by a raiyat, belonging to a Scheduled Tribe shall be void except where it is in favour of (a) a person belonging to a Scheduled Tribe; or (b) a person not belonging to a Scheduled 'Tribe when such transfer is made with the previous permission in writing of the Revenue Officer: Provided that in case of a transfer by sale the Revenue Officer shall not grant such permission unless he is satis fied that a purchaser belonging to a Scheduled Tribe willing to pay the market price for the land is not available, and in case of a gift unless he is satisfied about the bona fides thereof. (2) The State Government may having regard to the law and custom applicable to any area prior to the date of commence ment of this Act by notification direct that the restric tions provided in sub section (1) shall not apply to lands situ ated in such area or belonging to any particular tribe throughout the State or in any part of it. 94 (3) Except with the written permission of the Revenue Offi cer, no such holding shall be sold in execution of a decree to any person not belonging to a Scheduled Tribe. (4) Notwithstanding anything contained in any other law for the time being in force where any document required to be registered under the provisions of Cl. (a) to Cl. (e) of sub section (1) of section 17 of the (16 of 1908) purports to effect transfer of a holding or part thereof by a raiyat belonging to a Scheduled Tribe in favour of a person not belonging to a Scheduled Tribe, no register ing officer appointed under that Act shall register any such document, unless such document is accompanied by the written permission of the Revenue Officer for such transfer. (5) The provisions contained in sub Ss. 1 to 4 shall apply, mutatis mutandis, to the transfer of a holding or part thereof of a raiyat belonging to the Scheduled Castes. (6) Nothing in this section shall apply (a) to any sale in execution of a money decree passed, or to any transfer by way of mortgage executed, in favour of any scheduled bank or in favour of any bank to which the Orissa Co operative Societies Act, 1962 (Orissa Act 33 of 1962) applies; and (b) to any transfer by a member of a Scheduled Tribe within a Scheduled Area. Section 23: Effect of transfer in contravention of section 22. (1) In the case of any transfer in contravention of the provi sions of sub section (1) of section 22 the Revenue Officer on his own information or on the application of any person interest in the land may issue notice in the prescribed manner calling upon the transferor and transferee to show cause why the transfer should not be declared invalid. Section 22 clearly enjoins that a person belonging to Scheduled Tribe can not make a valid transfer of his lands in favour of a person not belonging to the Scheduled Tribe without obtaining the previous 95 permission in writing of the Revenue Officer to such trans fer. Subsection 5 of the said section further provides that the provisions contained in sub section 1 to 4 shall apply, mutatis mutandis to the transfer of a holding or part there of a raiyat belonging to the Scheduled Castes. Section 23 B of the said Act further provides that if the validity of the transfer of any holding or part thereof is in question, the burden of proof that the transfer was valid shall, notwith standing anything contained in any other law for the time being in force, lie on the transferee. In this case, the transfers made by the respondent Nos. 2 and 5 in favour of respondent No. 1, Prafulla Kumar Pati who admittedly belongs to Brahmin caste are hit by the provisions of Section 22 of the said Act in as much as the previous permission in writing of the Revenue Officer had not been obtained to the alleged transfers. It has been submitted on behalf of the respondent Nos. 2 and 5 that they belong to Dhoba (Dhobi) community which is one of the Sched uled Caste in the State of Orissa under the Scheduled Caste Order, 1950. It has been further contended that the father of the respondent No. 2 has been recorded as belonging to Dhoba community in the finally published record of rights which has been annexed as Annexure 'B ' to these appeals. It has also been submitted on behalf of the respondent Nos. 2 and 5 that the caste certificates granted by the Tehsildar, Betanoti as well as by the two local M.L.As. clearly estab lished that the respondent Nos. 2 and 5 belong to Dhoba community and as such they are Scheduled Castes. Much argu ment has been advanced on the mentioning of the caste of these two respondents as 'Rajaka ' in the alleged deeds on the ground that the caste 'Rajaka ' as mentioned in the sale deeds did not find place in the List and instead the Caste 'Dhoba ' appears in Item 26 of the List of Scheduled Castes in the State of Orissa under the Constitution of Scheduled Caste Order, 1950 as made under Article 341 of the Constitu tion of India. It has been urged in this connection that the Caste 'Rajaka ' as mentioned in the deeds can not be taken to be synonym of caste 'Dhoba ' and no evidence can be adduced to that effect to prove that 'Rajaka ' included within the notified caste, commentary of 'Dhoba ' as held by the High Court. We are unable to accept this contention advanced on behalf of the respondent Nos. 1, 3 and 4 on the ground that the caste of the respondent No. 2 and 5 was mentioned in the caste certificates granted by the Tehsildar, Betanoti as 'Dhoba '. Moreover, in the finally published record of rights the caste of the father of respondent No. 2 had been record ed also as 'Dhoba ' which undoubtedly is a Scheduled 96 Caste under the Scheduled Castes Order, 1950 issued under the provisions of Article 341 of the Constitution of India. It is also pertinent to mention that 'Rajaka ' is the literal synonym for the word 'Dhoba ' and according to the Puma Chandra Oriya Bhasakosha which is a recognised authority, the definition of 'Dhoba ' is Rajaka washerman. As such, the submission that the caste 'Rajaka ' is different from caste 'Dhoba ' is not at all sustainable. It is pertinent to refer in this connection to the observations of the Supreme Court in B. Basavalingappa vs D. Munichinnappa, ; at 320 wherein it has been observed that: "Ordinarily therefore it would not have been open in the present case to give evidence that the Voddar caste was the same as the Bhovi caste specified in the Order for Voddar caste is not mentioned in brackets after the Bhovi caste in the Order. But that in our opinion does not conclude the matter in the peculiar circumstances of the present case. The difficulty in the present case arises from the fact (which was not disputed before the High Court) that in the Mysore State as it was before the re organisation of 1956 there was no caste known as Bhovi at all. The Order refers to a scheduled caste known as Bhovi at the Mysore State as it was before 1956 and therefore it must be accepted that there was some caste which the President intended to include after consultation with the Rajpramukh in the Order, when the Order mentions the caste Bhovi as a scheduled caste. It cannot be accepted that the President included the caste Bhovi in the Order though there was no such caste at all in the Mysore State as it existed before 1956. But when it is not disputed that there was no caste specifically known as Bhovi in the Mysore State before 1956, the only course open to courts to find out which caste was meant by Bhovi is to take evidence in that behalf. " In the instant case, referring to this decision even though the respondent Nos. 2 and 5 i.e. the transferors mentioned in the deeds of transfer their caste as 'Rajaka ', there is no such caste mentioned in the Constitution of Scheduled Caste Order, 1950. In such circumstances, relying on the aforesaid observation of this Court, it is necessary and also incumbent on the Court to consider as to what caste the respondent Nos. 2 and 5 belong to. Moreover, considering the record of 97 rights as well as the various certificates issued by the revenue authorities and the local M.L.As. referred to here inbefore wherein the transferors have been described as belonging to 'Dhoba ' community, the irresistible conclusion that follows is that the respondents transferors belong to 'Dhoba ' caste which is one of the Scheduled Caste in the State of Orissa. In the premises aforesaid the judgment and order of the High Court referred to in O.J.C. Nos. 1007 and 1008 of 1983 are liable to be set aside. We, therefore, set aside the same and affirm the order of the Special Officer, Land Reforms, Central Division, Cuttack passed in O.L.R. Revision No. 131 of 1982 and O.L.R. No. 142 of 1982. The respondent Nos. 1, 3 and 4 are directed to restore the lands in ques tion to the possession of the respondent Nos. 2 and 5 forth with. The appeals are allowed without any order as to costs. T.N.A. Appeals allowed.

Respondent No. 2, a scheduled caste, filed a case for restoration of lands sold to respondent Nos. 1, 3 and 4, non scheduled castes, on the ground that the sale was in viola tion of section 22 of the Orissa Land Reforms Act, 1960 as the requisite permission of the Revenue Officer was not obtained. In the sale deed the transferor Respondent was described as 'Rajaka ' while in the caste certificate he was mentioned as ' Dhoba '. The Revenue Officer rejected the ease. Respondent No. 2 filed an appeal which was allowed by the Additional District Magistrate. Against the order of Additional District Magistrate a revision was preferred by respondent No. 1 which was dismissed by the Special Officer, Land Reforms by holding that merely because the word 'Raja ka ' does not find mention in the Scheduled Caste Order, 1950 does not exclude it from the purview of such an order. In the connected appeal respondent No. 5 filed a case for restoration of land sold to respondent No. 1 which was allowed by the Revenue Officer. The appeal filed by respond ent No. 1 was dismissed by the Additional District Magis trate. A Revision preferred by Respondent No. 1 was also dismissed by the Special Officer Land Reforms. Respondent No. 1 filed writ petitions in the High Court which quashed the orders made by the Special Officer, hold ing that the Revenue Authorities committed a serious error of law in holding that 89 'Rajaka ' caste was included within the notified caste/commu nity of Dhoba '. In these appeals it was contended on behalf of transfer ee respondents that the Caste 'Rajaka ' mentioned in the sale deeds cannot be taken to be synonym of caste 'Dhoba ' men tioned in Item 26 of the List in Scheduled Castes Order, 1950. Allowing the appeals, this Court, HELD: 1. Though the respondent Nos. 2 and 5 i.e. the transferors mentioned in the deeds of transfer their caste as 'Rajaka ' there is no such caste mentioned in the Consti tution (Scheduled Castes) Order, 1950. In such circum stances, it is necessary and also incumbent on the Court to consider as to what caste they belong to. [96B] B. Basavalingappa vs D. Munichinnappa, [1965] 1 S.C.R. 316, followed. 2. 'Rajaka ' is the literal synonym for the word 'Dhoba ' and according to the Purna Chandra Oriya Bhasakosh a which is a recognised authority, the definition of 'Dhoba ' is Rajaka washerman. Therefore the submission that the caste 'Rajaka ' is different from caste 'Dhoba ' is not at all sustainable. [96A] 3. In the record of rights as well as the various cer tificates issued by the revenue authorities and the local M.L.As the transferors have been described as belonging to 'Dhoba ' community. The irresistible conclusion that follows is that the respondent transferors belong to 'Dhoba ' caste which is one of the Scheduled Caste in the State of Orissa. [96H, 97A] 3.1 Therefore the transfers made by respondent Nos. 2 and 5 in favour of respondent No. 1, who admittedly belongs to Brahmin caste, are hit by the provisions of Section 22 of the Orissa Land Reforms Act, 1960 in as much as the previous permission in writing of the Revenue Officer had not been obtained to the alleged transfers. [95C] [The transferee respondents directed to restore the lands in question to the possession of the transferor respondents forthwith.] [97C]

ivil Appeal No. 1638 of 1987. From the Judgment and Order dated 28.11.1986 of the Karnataka High Court in C.R.P. No. 365 of 1984. S.B. Bhasme and A.S. Bhasme for the Appellant. R.S. Hegde and S.N. Bhat for the Respondent. The Judgment of the Court was delivered by KANIA, J. This is an appeal from a judgment and order of a learned Single Judge of the Karnataka High Court. Only a few facts are necessary to appreciate the contro versy raised before us. 476 The appellant herein was the plaintiff in Original Suit No. 103 of 1981 in the Court of 2nd Additional Civil Judge, Belgaum. It was the case of the appellant in the plaint that on July 16, 1976 the respondentdefendant entered into an agreement in his favour for sale of the suit property com prising a shop and a bhatti room situated at Kirloskar Road, Belgaum City for a sum of Rs.20,000. The appellant paid to the respondent as part consideration a sum of Rs.5,000 and pursuant to the agreement for sale the appellant was put in possession of the suit property. The sale agreement provided that the registered sale deed was to be executed by the respondent after securing a No Objection certificate or permission from the competent officer as required under the Karnataka Urban Land Ceiling Act and within one month of the grant of such permission. The respondent received the No Objection or permission as aforesaid on March 31, 1981 but failed to execute the registered deed of sale as provided under the said agreement. Hence, on 30th June, 1981, the appellant filed the present suit. It may be observed here that in the plaint, there was no specific averment that the appellant was and had always been ready and willing to perform his part of the said agreement. The respondent filed a written statement raising several contentions and inter alia raised the contention that the suit was not maintain able for non compliance with the provisions of section 16(c) of the . The issue as to whether the suit was not maintainable on the aforesaid ground was directed to be tried as a preliminary issue. At this stage, the appellant applied for leave to amend the plaint by incorporating an averment in the plaint that the appellant was and had always been ready and willing to perform his part of the said agreement. The learned Additional Civil Judge before whom the said application was made, rejected the same. A revision petition was preferred by the appellant against the judgment of the learned Additional Civil Judge to the High Court of Karnataka but the said revision peti tion was dismissed by a learned Single Judge of the said High Court as aforesaid. The learned judge took the view that the application for amendment was filed beyond the period of limitation and the application could not be grant ed as a vested right of the respondent would be disturbed by allowing the said amendment. It is the correctness of this decision which is challenged before us. In the leading case of Pirgonda Hongonda Patii vs Kal gonda Shidgonda Patil and Others, ; a Bench comprising three learned Judges of this Court laid down the principles which should govern the question of granting or disallowing amendments. It was held by this Court that all amendments ought to be allowed which 477 satisfy the two conditions: (a) not working injustice to the other side, and (b) of being necessary for the purpose of determining the real questions in controversy between the parties. Amendments should be refused only where the other party cannot be placed in the same position as if the plead ing had been originally correct, but the amendment would cause him an injury which could not be compensated in costs. It is merely a particular case of this general rule that where a plaintiff seeks to amend by setting up a fresh claim in respect of a cause of action which since the institution of the suit had become barred by limitation, the amendment must be refused; to allow it would be to cause the defendant an injury which could not be compensated in costs by depriv ing him of a good defence to the claim. In L.J. Leach & Co. & Anr. vs Messrs Jardine Skinner & Co., ; another Bench comprising three learned Judges of this Court held that it is no doubt true that courts would, as a rule, decline to allow amendments, if a fresh suit on the amended claim would be barred by limita tion on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered, and does not affect the power of the Court to order it, if that is required in the interests of justice. If these principles are to be followed, there is little doubt that the learned judge was in error in rejecting the application for amendment made by the appellant. In the present case no fresh cause of action was sought to be introduced by the amendment applied for. All that the appel lant sought to do was to complete the cause of action for specific performance for which relief he had already prayed. It was only that one averment required in law to be made in a plaint in a suit for specific performance in view of the provisions of sub section (c) of section 16 of the was not made, probably on account of some over sight or mistake of the lawyer who drafted the plaint and that error was sought to be rectified by the amendment applied for. There was no fresh cause of action sought to be introduced by the amendment and hence, no question of caus ing any injustice to the respondent on that account arose. Learned counsel for the respondent placed strong reli ance on the decision of this Court in Ouseph Varghese vs Joseph Aley and Others, In that case, a suit for specific performance was filed by the plaintiff on the basis of an alleged agreement with the first defendant. The defendant denied the agreement and went on to state that just before his death her husband had agreed to sell to the plaintiff 478 Item No. 1 of the suit property less one acre of paddy field for a sum of Rs. 11,000 but due to the illness of her hus band, the sale in question could not be effected. After the written statement to this effect was filed, no application for amendment to the plaint was made. The Trial Court de creed the suit. In the appeal, the High Court did not accept the agreement pleaded by the plaintiff, but granted a decree on the basis of the agreement set out in the written state ment. It was held by a Bench comprising two learned Judges of this Court that the agreement pleaded by the defendant was wholly different from that pleaded by the plaintiff. The plaintiff did not plead either in the plaint or at any subsequent stage that he was ready and willing to perform the agreement pleaded in the written statement and hence, no decree on the basis of that agreement should have been passed in his favour as done by the High Court. The Court held that it was well settled that in a suit for specific performance, the plaintiff should allege that he is ready and willing to perform his part of the contract and in the absence of such an allegation in the plaint, the suit is not maintainable. In our opinion, this case does not lend any support to the argument of the learned counsel for the respondent, as in the present case there is no question of any decree being passed on the basis of any agreement other than the one pleaded by the appellant in the plaint. In the result, the judgment and order passed by the learned Single Judge are set aside. The appeal is allowed. The amendment applied for by the appellant is allowed. The amendment to be carried out by the appellant at his own expense within eight weeks of a certified copy of this order being received by the Trial Court. The Trial Court shall thereafter give time to the respondent to file a supplemen tary written statement, if so advised, and dispose of the case on merits according to law. There will be no order as to costs of the appeal. G.N. Appeal allowed.

For selling an immovable property, respondent entered into an agreement with the appellant. Appellant paid part of the consideration and he was put in possession of the property. Since the respondent failed to execute the regis tered sale deed, the appellant filed a suit. There was no specific averment in the suit that the appellant was and had always been ready and willing to perform his part of the agreement. Respondent contended inter alia that the suit was not maintainable for non compliance with the provisions of Section 16(c) of the . This issue was directed to be tried as a preliminary issue. At that stage, the appellant applied for leave to amend the plaint by incorporating an averment that he was always and had been ready and willing to perform his part of the agreement. The trial court rejected the application. The revision petition filed in the High Court was dis missed. The High Court took the view that the application for amendment was filed beyond the period of limitation and cannot be granted, as a vested interest of the respondent would be disturbed. This appeal is against the judgment of the High Court. Allowing the appeal, this Court, HELD: 1.1 Amendments should be refused only where the other party cannot be placed in the same position as if the pleading had been originally correct, but the amendment would cause him an injury which could not be compensated in costs. It is merely a particular case of this general rule that. where a plaintiff seeks to amend by setting up a fresh 475 claim in respect of a cause of action which, since the institution of the suit, had become barred by limitation, the amendment must be refused; to allow it would be to cause the defendant an injury which could not be compensated in costs by depriving him of a good defence to the claim. Courts would as a rule, decline to allow amendments, if a fresh suit on the amended claim would be barred by limita tion on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether application for amendment should be granted and does not affect the power of the Court to order it, if that is required in the interest of justice. [477A D] 1.2 In the present case, no fresh cause of action was sought to be introduced by the amendment applied for. All that the appellant sought to do was to complete the cause of action for specific performance and add an averment which required to be added in view of the provisions of sub sec tion (c) of Section 16 of the . There was no fresh cause of action sought to be introduced by the amendment and hence, no question of causing any injustice to the respondent on that account arose. [477E F] Pirgonda Hongonda Patil vs Kalgonda Shidgonda Patil and Ors., ; and L.J. Leach & Co. and Anr. vs Messrs Jardine Skinner & Co., ; , relied on. Ouseph Varghese vs Joseph Aley & Ors., , distinguished.

Civil Appeal No. 1264 of 1969. Appeal by certificate from the judgment and order dated the 12th Feb., 1968 of the High Court of Assam and Nagaland at Gauhati in First Appeal No. 21 of 1963. D. Mookherjee and section K. Nandy, for the appellant. M. H. Chowdhury and section N. Chowdhury, for the respondent The Judgment of the Court was delivered by KRISHNA IYER, J. The concurrent conclusions of fact reached by both the courts below regarding the quantum of compensation payable to the appellant on the acquisition of his land for a public purpose by the State are assailed by Shri D. Mukherjee before us on the ground that the amount is grossly inadequate. Having heard him in the light of the High Court 's reasoning, we are persuaded to affirm the finding. 100 bighas of land belonging to the appellant (a Tea Planter) were first requisitioned by Government to settle landless people and the owner 'gladly ' agreed to surrender the area which, on his own showing, was lying unused. Later, the State proceeded to acquire the land under s.7 (1A) of the Assam Land (Requisition and Acquisition) Act, 1948 (Assam Act XXV of 1948). The sole dispute turns on whether the lesser scale of compensation proceeded under s.7(1A) or the larger one stipulated under s.7(1) is attracted to the situation. The simple statutory test that settles the issue is to find out whether the land acquired is Lying fallow or uncultivated. If it is, a small compensation alone is awardable, as laid down in s.7(1A) of the Act. On the other 69 hand. if it is ten garden, the quantum is as under section 23 of the Land Acquisition Act, 1894. This decisive factor lends itself to easy decision, because a plethora of evidence, to most of which the appellant is a party, proceeds on the basis that the land in question is fallow. The High Court has collected and considered the prior statements and other materials leading to the reasonable holding that s.7(1A) appropriately applied to this case. It follows that the appeal has no merit and deserves to be dismissed. We order both parties to bear their respective costs. Subject to this direction, the appeal is dismissed. V. M. K. Appeal dismissed.

100 bights of land lying unused were requisitioned by Government to settle landless people. The appellant, a tea planter, willingly surrendered the same. But, when the State proceeded to acquire the land under section 7(1A) of ' the Assam Land (Requisition and Acquisition) Act, 1948 he disputed the payment of lesser scale of compensation prescribed under section 7(1A) of the Act. 'The Courts below concurrently held against him. Dismissing the appeal, ^ HELD: The simple statutory test that settles the issue is lo find out whether the land acquired is Lying fallow or uncultivated. If it is, a small compensation alone is awardable, as laid down in section 7(1A) of the Act. On the other hand, if it is tea garden, the quantum is as under section 23 of the Land Acquisition Act, 1894. Plethora of evidence adduced in this case clearly proceeds on the basis that the land in question is fallow. The High Court has, therefore, rightly held that section 7(1A) appropriately applied to this case. [68H 69B]

N: Criminal Appeal Nos. 212 213/71. Appeal from the Judgment and order dated the 21st November, 1970 of the Gujarat High Court in Criminal Revision Applications Nos. 321 and 322 of 1969. section N. Anand and M. N. Shroff for the Appellant. N. H. Hingorani and (Mrs.) K. Hingorani for the Respondent The Judgment of the Court was delivered by SARKARIA, J. Controversy in these appeals centres round the interpretation of the words "specially empowered" appearing in section 2(c) of the Suppression of Immoral Traffic in Women and Girls Act, 1956 (to be (hereinafter referred to as the Act). The facts giving rise to these appeals are as follows: Chaturbhuj Maganlal and Bai Sabita, respondents herein, are husband and wife residing together at Parvati Bhuvan, Rajkot. Both 1078 of them together with Bai Hamida Basi Mohammed, respondent 3 herein, are accused 1, 2 and 3 respectively, in a trial for offences punishable under sections 5 and 6 of the Act before the Judicial Magistrate, First Class Rajkot in Cr. Cases Nos. 1372 and 1404 of 1968. When the trial was about to commence in these cases, the accused moved applications raising an objection that the Magistrate had no jurisdiction to try the offences as he had not been "specially empowered" as required by section 2(c) of the Act. The Magistrate rejected those applications whereupon the accused went in revision before the Sessions Judge, Rajkot who dismissed the same. Aggrieved, the accused filed two revisions (Cr. R. 321 and 322 of 1969) in the High Court of Gujarat. A learned Judge of the High Court allowed the revisions on the ground that Mr. Modha, Magistrate 1st Class Rajkot, before whom these cases were pending, had no jurisdiction to try the same because the State Government notification, dated February 19, 1959 did not have the effect of making him a "Magistrate of the first class specially empowered" within the meaning of section 2(c) of the Act. Accordingly, the Magistrate was directed to drop the proceedings pending against the revision petitioners. Against that decision of the High Court, the State has now filed these appeals on a certificate granted by the High Court under Article 134 (1) (c) of the Constitution. Section 2(c) of the Act defines a "Magistrate" to mean "a District Magistrate, a Sub Divisional Magistrate of the First Class specially empowered by the State Government, by notification in the Official Gazette, to exercise jurisdiction under the Act". Section 22 further says: "No court inferior to that of a magistrate as defined in Clause (c) of Section 2 shall try any offence under Section 3, Section 4, Section 5, Section 6, Section 7 or Section 8". The State Government Notification No. PPA/1257/84187/X of July 22, 1958, published in the Bombay Government Gazette of July 31, 1958, purporting to have been issued under section 2(c), runs as follows: "In the exercise of the powers conferred by section 2(c) of the Suppression of Immoral Traffic in Women and Girls Act, 1956, the Government of Bombay hereby empowers all the Judicial Magistrates of the First Class to exercise jurisdiction under the said Act, except under sections 12(1), 18(1), 19, 20(1) and (3) of the Act. " The question is, whether this notification has the effect of making every Judicial Magistrate of the First Class in the State within the area of his respective jurisdiction, a Magistrate competent to try any offence under sections 3, 4, 5, 6, 7 and or 8 of the Act? 1079 Answer to this question depends on a correct interpretation of the expression "specially empowered" in Section 2(c). There has been a sharp conflict of judicial opinion in regard to the meaning of this expression. One line of decisions has taken the view (hereafter referred to us the narrow view) that the word "specially" in this expression has reference only to the mode of empowerment as indicated in section 39(1) of the Code of Criminal Procedure, 1898. According to this view the word "specially" stands in contrast to the word "generally". Therefore, if powers to try certain offences are conferred on a class of officials by their official title, they are "generally empowered"; but if the powers are conferred on particular individuals by name or by virtue of their office, they are "specially empowered". On this reasoning it is deduced that the words "specially empowered" imply "the exercise by Government of a certain selection or discrimination as regards an individual on whom the special power is to be conferred". Some of the cases in which this view has been expounded are: Mohd. Qasim and anr. vs Emperor; Emperor vs Udho Chandumal; Polubha Vajubha vs Tapu Ruda; and Sabuddin Sheikh Mansur vs J. section Thakkar and anr. A different view (hereafter referred to as the broad view) has been taken in these decisions: K. N. Vijavan vs State; State vs Judhabir Caetri; State of Mysore vs Kashambi and anr. ; Ashaq Hussain Khan vs section D. O. Monghir, C. V. Madhava Mannadiar vs District Collector and ors. According to this view, the word "specially" has reference to the special purpose of the empowerment and is not intended to convey the sense of a "special" as contrasted with a "general" empowerment. "Specially" qualifies the word "empowered" and not the person on whom the power is conferred. In this view, the State Government is within its competence to confer powers under section 2(c) of the Act on some or all the Magistrates of the First Class in the State, in any of the modes known to law, and the Magistrate or Magistrates whom powers are so conferred will be "specially empowered" within the meaning of section 2(c). In our opinion, this broad view rightly keeps in focus the special purpose of the empowerment and must be preferred to the narrow view. It is will recognised that where the language of a statutory provision is susceptible of two interpretations, the one which promotes the object of the provision, comports best with its purpose and preserves its smooth working, should be chosen in preference to the other which introduces inconvenience and uncertainty in the working of the system. This rule will apply in full force where the provision confers ample 1080 discretion on the Government for a specific purpose to enable it to bring about an effective result. The Act has been enacted to suppress a special kind of mischief. With that end in view it creates new offences, and confers wide powers on the Government to constitute special machinery for its enforcement. Th narrow view taken in the decision led by Mohd. Qasim 's case, which reads, with external aid, into the expression "specially empowered" a restriction as to the mode or manner of empowerment, is neither congenial to the special purpose of the provision, nor conducive to the main object of the Act. It tends to introduce unnecessary inconvenience, friction, confusion and artificiality in the working of the provision. It also tends to reduce its efficacy and impede the exercise of the discretionary power which the Legislature has, in its wisdom, confided in full measure to the Government. In the context of section 2(c) of the Act, therefore, the narrow, restrictive interpretation of the expression "specially empowered" has to be eschewed. Incidently, it may be noticed that none of the decisions expounding the narrow view, was concerned with the interpretation of the expression "specially empowered" in the context of the Suppression of Immoral Traffic in Women and Girls Act. In Mohammed Qasim vs Emperor, (supra) which leads the exponents of this view, the Madras High Court was concerned with the construction of this expression as used in section 3 of the Opium Act. Similarly, the Full Bench decision of the Gujarat High Court in Sabuddin 's case (supra) (the ratio of which has been followed by the Judgment under appeal), turns on an interpretation of this expression in the context of section 56 of the Bombay Police Act. On the other hand, in State of Mysore vs Kashambi and anr. (supra) which is a prominent exponent of the broad view, the construction of section 2(c) of the Act was directly in issue before the Mysore High Court. Therein, by a notification, the State Government conferred powers on all First Class Magistrates to try cases under the Act. The accused, Kashambi and Mohadinbi were being prosecuted under section 8(a) of the Act in the court of Judicial Magistrate First Class, Saundatti. The accused raised an objection that the Magistrate had no jurisdiction to try the cases because the aforesaid notification was invalid and ineffective to confer the jurisdiction on him as it did not satisfy the requirement of section 2(c) regarding "special empowerment". Hegde, J., who spoke for the Bench, expressly dissented from the view taken in Polubha Vajubha vs Tepu Buda (supra) and Mohammed Qasim vs Emperor (supra) and held that the language of section 2(c) of the Act does not justify the contention that such a notification amounts to general conferment of power as opposed to special conferment of power as required by section 2(c) and therefore enlarges the scope of that section. In the opinion of the Bench, the word "specially" is an adjective (adverb ?) to the verb "empowered" and not an adjective to the noun "Magistrate" and that this word means "specifically" or "for a particular purpose". The Bench did not accept the contention that the word "specially" conveys the idea of picking and choosing of the Magistrate or Magistrates for the purpose 1081 of conferring the additional powers. It was emphasised that the conferment of power under section 2(c) of the Act is not made by having recourse to section 39, Cr. Procedure Code. In our opinion, the view taken by the Mysore High Court in Kashambi 's case is the correct one. It seems to be more in accord with the trend of the recent decisions of this Court, in which such an expression came up for construction. In this connection, the first case to be noticed is Sindhi Lohana Chaithram vs State of Gujarat. Therein the meaning of the expression "specially empowered" occurring in s.6(1) of the Bombay Prevention of Gambling Act, 1887 came up for consideration. By a notification, dated January 22, 1955. the Saurahtra Government empowered specially certain Assistant Superintendents and Deputy Superintendents of Police, Porbander Division, Porbander, to authorise by issue of special warrants in each case, a police officer not below the rank of Sub Inspector of Police to do the Varios things necessary in order to raid a house when the police officer suspected gaming to be carried on and which house, room or place was suspected us being used as a common gaming house. The appellant 's house was raided by a Sub Inspector of Police,and on the basis of incriminating evidence the appellant and six others were charged under sections 4 and 6 of the Act. At the trial the accused contended that Shri Pandhya, the Deputy Superintendent of Porbander who issued the search warrant, was not authorised to do so because the aforesaid notification did not specially empower Shri Pandhya within the contemplation of section 6. This Court expressed that in view of the principle embodied in section 15 of the Bombay General Clauses Act, 1904 when power is conferred on a person by name or by virture of his office, the individual designated by name or as the holder of the office for the time being is empowered specially. Judging by this test, the Court held that the notification, dated January 22, 1955, "specially empowered" Shri Pandhya, holder of the office of the Dy. Superintendent of Police,Porbander to issue the search warrant under section 6. The Court noticed the conflict of judicial opinion on the question whether a notification empowering all Magistrates of certain class to try certain class, can be said to be empowered specially every Magistrate of that class to try those cases,but left that question open. However, it settled that a person can be specially empowered even by virtue of his office. Again, in Abdul Husein Tayabali and ors. vs State of Gujarat and ors. decided on September 20, 1967, the construction of the expression "specially appointed" within the meaning of section 3(c) of the Land Acquisition Act, 1894 read with r. 4 of the Land Acquisition (Company 's) Rules, came up for consideration before this Court. By a notification, dated October 1, 1963, issued under section 3(c) of the Land Acquisition Act, the State Government authorised all Special Land Acquisition Officers in the State to perform the functions of 1082 Collectors under that Act within the area of their respective jurisdiction. Question arose whether that notification satisfied the requirements of section 3(c) and had the effect of specially empowering all the Land Acquisition Officers as a class to perform the duties under the Act. Shelat, J., speaking for a Bench of three learned Judges, answered this question in the affirmative and made these apposite observations: "In our view, these words (specially appointed) simply mean that as such an officer is not a Collector and cannot perform the functions of a Collector under the Act, he has to be 'specially appointed ', that is, appointed for the specific purpose of performing those functions. The word specially 'has therefore reference to the special purpose of appointment and is not used to convey the sense of a special as against a general appointment. The word "specially" thus connotes the appointment of an officer or officers to perform functions which ordinarily a Collector would perform under the Act. It qualifies the word "appointed" and means no more than that he is appointed specially to perform the functions entrusted by the Act to the Collector. It is the appointment therefore which is special and not the person from amongst several such officers. Besides sec. 15 of the General Clauses Act provides that where a Central Act empowers an authority to appoint a person to perform a certain function such power can be exercised either by name or by virtue of office. " There would therefore be no objection if the appointment is made of an officer by virtue of his office and not by his name. " The above observations are an apt guide to the interpretation of the expression "specially empowered" in section 2(c) of the Act with which we are concerned. Although the word in section 3(c) of the Land Acquisition Act, the construction of which was considered in Abdul Hussain 's case, were "specially appointed", their connotation is the same as conveyed by the expression "specially authorised" or "specially empowered" (see Oxford Dictionary according to which the word "authorised" means "empowered" "appointed"). In constructing the expression "specially empowered" in the instant case, therefore,we can safely adopt the reasoning in Abdul Hussain 's case. Thus considered, the term "specially" must be taken to have reference to the special purpose of the empowerment. Even according to Oxford Dictionary, one sense of this word is "of special purpose". It qualifies the word "empowered". It is used in an attributive sense to highlight the special nature of the power. It does not convey the sense of a contradistinction or contrast between "special" empowerment and "general" empowerment. All that this word signifies is the investment of some or all the Magistrates of the First Class with powers which are 'special 'and are not part of the 'ordinary ' or 'additional 'powers which can be conferred on a Magistrate of the First Class under the Code of Criminal Procedure. In short, the word "specially" 1083 cannotes that it is the empowerment which is special and not the person. Thus considered, special empowerment does not necessarily involve selection of individuals by name or ex offico from the Magistrates of the 1st Class. The fallacy in the narrow view stems from the undue stress it lays on the mode of empowerment at the cost of the special purpose of the empowerment, forgetting that the Act is a code by itself which creates new offences triables only by those Magistrates of the 1st Class who are specially empowered under section 2(c) of the Act,and not under the Code of Criminal Procedure. Be that as it may,s.39 of the Code of Criminal Procedure, 1898 and s.32 of the Code of Criminal Procedure,1973, are concerned with the mode of conferring power. "Power may be conferred on any person either by name or in virtue of his office", or "on classes of official generally by their official title". The special mode or the general mode of conferring the power applies to the conferment of power both for a general purpose or a special purpose. The mode of conferring power is not to be confused with the purpose of the power,as seems to have been done in the cases taking the narrow view. The narrow view can be tested yet from another angle. According to it if a Magistrate of the 1st Class is selected by name or by virtue of his office and invested with these powers to try offences under the Act,he would be "specially empowered". If no such pick and chose is made and the power is conferred on all the Magistrates of the same class, they would be "generally empowered". This distinction if taken to its logical and, breaks down, and exposes the inherent artificiality of the proposition. If the empowering of a Magistrate of the First Class to try offences under this Act, by virtue of his office, satisfies the requirements of section 2(c), it is not understood how the empowerment of a whole class of Magistrates of the First Class by the same mode becomes ultra vires the section. In Abdul Hussain 's case, the contention canvassed for the narrow view was considered from this aspect, also. It was observed: ". even if the meaning of the word 'specially ' were to be that which is canvassed (by the appellant), the Government could have issued separate notification for each of the Sp. L. A. Officers authorising them individually to perform the functions of the Collector within their respective area of jurisdiction. Instead of doing that, if one notification were to be issued authorising each of them to perform those functions there could be no valid objection. Such a notification would have the same force as a separate notification in respect of each individual Sp. L. A. Officer. Such a notification would mean that the Government thereby appoints each of the existing Sp. L. A. Officers to perform the functions of the Collector within their respective areas. " 1084 On parity of reasoning ,it can be said that the empowerment of all the Magistrates of the First Class, in the State under one notification ,by virtue of their office to try offences under the Act in the area of their respective jurisdiction, must be held to be "special" and not "general". It will not be out of place to mention here that Abdul Hussain 's case was decided by this Court on September 20, 1967, that is, about four and half months after the Full Bench decision of the Gujarat High Court in Sabuddin 's case (supra), Consequently, the Bench did not have the advantage of the guidance furnished by Abdul Hussain 's case. In the light of the construction put by us on the expression "specially empowered" as used in section 2(c) of the Act, we hold that by virtue of the State Government Notification dated July 22, 1958, the Judicial Magistrate First Class Rajkot has the jurisdiction to try the offences under the Act. Accordingly, we allow these appeals, set aside the judgment of the High Court. The cases will now go back to the Judicial Magistrate, First Class, Rajkot for further proceedings in accordance with law. The cases, being very old, it is directed that they be disposed of on top priority basis, with utmost expedition, if possible, within three months from today. V.P.S. Appeals allowed.

Section 2(c), Suppression of Immoral Traffic in Women and Girls Act, 1956, defines a Magistrate to mean a District Magistrate, a Sub Divisional Magistrate of the First Class specially empowered by the State Government by notification in the official Gazette, to exercise jurisdiction under the Act. The appellant State issued a notification under the section empowering all the Judicial Magistrates of the 1st Class to exercise jurisdiction to try certain offences under the Act. The High Court held that the notification did not have the effect of making a Magistrate one specially empowered within the meaning of section 2(c). Allowing the appeal to this Court, ^ HELD: It is not necessary that the State Government should pick and choose individual Magistrates and confer special power on them. The notification had the effect of making every Judicial Magistrate of the First Class in the State, within the area of his respective jurisdiction, a Magistrate specially empowered to try those offences. [1083E; 1084C] Mohd. Qasim & Anr. vs Emperor, AIR, ; Emperor vs Udho Chandumal, AIR 1943 Sind 107; Polubha Vajubha vs Tapu Buda, AIR 1956 Sau. 73 and Sabuddin Sheikh Mansur vs J. section Thakkar & Anr. ILR [1968] Guj. 4, disapproved. K. N. Vijayan vs State, AIR 1953 Tr. Co. 402. State vs Judhabir Caetri AIR 1953 Assam 35; (F.B.); State of Mysore vs Kashambi & Anr: ; Ashaq Hussain Khan vs S.D.O. Manghir. ATR 1965 Pat 446 and C. V. Madhava Mannadiar vs Distt. Collector & Ors., AIR 1970 Kerala 50. approved. (1) Where the language of a statutory provision is susceptible of two interpretations, the one which promotes the object of the provision. comports best with its purpose and preserves its smooth working, should be chosen in preference to the other which introduces inconvenience and uncertainty in the working of the system. This rule will apply in full force where the provision confers ample discretion on the Government for a specific purpose to enable it to bring about an effective result. [1079G 1080A] (2) The word "specially" has reference to the special purpose of the empowerment and is not intended to convey the sense of a "special" as Contrasted with a "general" empowerment. "Specially" qualifies the word "empowered" and not the person on whom the power is conferred. In this view the State Government is within its competence to confer powers under the section on some or all of the Magistrates of the First Class in the State in any of the modes known to law and the Magistrate or Magistrates. On whom Powers are so conferred, will be "specially empowered" within the meaning of the section. This broad view keeps in focus the special purpose of the empowerment and must be preferred to the narrow view, namely. That the word "specially" stands in contrast to the word "generally". According to 1077 the narrow view if powers to try certain offences are conferred on a class of officials by their official title, they are "generally empowered '; but if the powers are conferred on particular individuals by name or by virtue of their office, as a result of selection by the Government, they are 'specially empowered". This view which reads into the expression "specially empowered" a restriction as to the mode or manner of empowerment, is neither congenial to the special purpose of the provision, nor conducive to the main object of the Act, and tends to reduce its efficacy and to impede the exercise of the discretionary power which the legislature has confided in full measure to the Government.[1079B D, E G; 1080B C, H; 1082G] (3) The word "specially" signifies the investment of some or all the Magistrates of the First Class with powers which are "special ' and are not part of the "ordinary" or "additional" powers which can be conferred on a Magistrate of the First Class under the Code of Criminal Procedure. The fallacy in the narrow view stems from the undue stress it lavs on the mode empowerment at the cost of the special purpose of the empowerment ignoring the fact that the Act is a code by itself which creates new offences triable only by those Magistrates of the First Class who are specially empowered under section 2(c) of the Act, and not under the Code of Criminal Procedure. Power may be conferred under section 39 of the Code of Criminal Procedure, 1898, corresponding to section 32 of the Code of Criminal Procedure, 1973, on any person either by name or in virtue of his office or on classes of officials generally by their official title. The special mode or the general mode of conferring the power applies to the conferment of power both for a general purpose or a special purpose. The mode of conferring power is not to be confused with the purposes of the power. [1082H; 1083B D] (4) A person can be specially empowered even by virtue of his office. If empowering a Magistrate of the First Class to try offences under the Act by virtue of his office satisfies the requirement of section 2(c), there is no reason why the empowerment of all the Magistrates of the First Class in the State under the notification by virtue of their office to try offences under the Act in the areas of their respective jurisdictions should not be held to be special but treated as general. The Government could have issued separate notifications for each Magistrate. Instead of doing so if one notification were to be issued authorising each of them to perform those functions, there could be no valid objection. [1081F G; 1083E F, G 1084B] Sindhi Lokana Chajthram vs State of Gujarat, ; and Abdul Hussain Tayabali and ors. vs State of Gujarat and ors. ; , followed.

Special Leave Petition (Civil) Nos. 14179 80 of 1985 385 From the Judgment and Order dated 11.7.1985 of the Andhra Pradesh High Court in Writ Appeal No. 1443 and 1467 of 1984. T.U. Mehta and A. Subba Rao for the Petitioners. Dr. Y.S. Chitale, T.V.S.N. Chari and Miss Vrinda Grover for the Respondent. The Judgment of the Court was delivered by THAKKAR, J. Does that part of the provision which provides for payment of a larger amount of gratuity with prospective effect from the specified date offend Article 14 of the Constitution of India? Whether gratuity must be paid on the stepped up basis, to all those who have retired before the date of the upward revision, with retrospective effect, even if the provision provides for prospective operation, in order not to offend Article 14 of the Constitution of India? A Division Bench of the High Court of Andhra Pradesh says 'no '. In our opinion it rightly says so. The petitioners, erstwhile Government employees who had retired "before" April 1, 1978, inter alia claimed and contended before the High Court that they were entitled to the benefit to the Government order No. 88 dated 26 March, 1980 providing that: "(b) Retirement gratuity may be 1/3rd of pay drawn at the time of retirement for every 6 monthly service subject to maximum of 20 months pay limited to Rs.30,000. " The said order in so far as gratuity is concerned is made effective from 1st April, 1978. Says the High Court: "Therefore, we are now only concerned whether this G.O. Ms. No. 88, dated 26 3 1980, should be made applicable to the pensioners that retired prior to 1 4 1978 by revising their gratuity payable to them. The learned Advocate General, contends, that gratuity is something different from the other pensionary benefits like the pension and the family pension, which are continuing ones. The Gratuity that accrued to the petitioners prior to 1 4 1978 was calculated on the then existing Rules and paid. In that way, the pensioners retired prior to 1 4 1978 will form themselves into a distinct class for purposes of the pay 386 ment of benefit of gratuity from the others that retired after 1 4 1978, from which date, the revised pension rules are made to be applied by the Government. On the other hand, it is the contention of the writ petitioners that gratuity is a part and parcel of the pensionary benefits and the same cannot be looked separately from the other pensionary reliefs. The learned counsel for the Writ Petitioners, no doubt, cited two decisions (1) V.P. Gautama, IAS Retd. vs Union of India (SLJ 1984 (1) 120) (2) M.P. Tandon vs State of U.P. , where their Lordships that decided the above two cases, held, that no distinction can be made in the pensionary benefits including death cum retirement gratuity benefit between the pensioners that retired prior to the stipulated date and after the stipulated date. In the decision D.S. Nakara vs Union of India, (A.I.R. , their Lordships of the Supreme Court enunciated the principle as follows: "With the expanding horizons of socioeconomic justice, the Socialist Republic and Welfare State which the country endeavours to set up and the fact that the old man who retired when emoluments were comparatively low are exposed to vegaries of continuously rising prices, the falling value of the ruppe consequent upon inflationary inputs, by introducing an arbitrary eligibility criteria, 'being in service and retiring subsequent to the specified date ' for being eligible for the liberalised pension scheme and thereby dividing a homogeneous class, the classification being not based on any discernible rational principle and being wholly unrelated to the objects sought to be achieved by grant of liberalised pension and the eligibility criteria devised being throughly arbitrary, the eligibility for liberalised pension scheme of "being in service on the specified date and retiring subsequent to that date" in the memoranda Exs. P 1 and P 2, violated article 14 and is unconstitutional and liable to be struck down." After thus enunciating the principle, their Lordships have taken care to observe as follows: "But we make it abundantly clear that arrears are not re 387 quired to be made because to that extent the scheme is prospective." In our opinion, the arrears relating to gratuity benefit computed according to the Revised Pension Rules of 1980 may not be paid to the pensioners that retired prior to 1 4 1978 because at the time of retirement, they are governed by the then existing Rules and their gratuity was calculated on that basis. The same was paid. Since the revised scheme is operative from the date mentioned in the scheme, i.e. 1 4 1978, the continuing rights of the pensioners to receive pension and family pension must also be revised according to that scheme. But the same cannot be said with regard to gratuity, which was accrued and drawn. The reason why their Lordships of the Supreme Court in Nakara 's case refused to grant arrears to the pensioners that retired prior to the stipulated date would ipso facto apply for refusing to grant the revised gratuity, since that would amount to asking the State Government to pay arrears relating to gratuity after revising them according to the new scheme for those that retired prior to 1 4 1978 and that would amount to giving retrospective effect to the A.P. Revised Pension Rules, 1980, which came into effect from 29 10 1979 and in the case of Part II of those Rules from 1 4 1978. The scheme is prospective and not retrospective. Moreover, we must remember that when the State Government appointed the Pay Revision Commissioner to review the then existing scales of pay under G.O. Ms. No. 745, General Administration (Spl. A) Department, dated 3 11 1978, the Pay Revision Commissioner was asked to take into account, while making his recommendation, the economic conditions in the State, the financial implications of his recommendations, and the impact thereof on the resources avilable for the plan and other essential non plan expenditure. Surely, the Pay Revision Commissioner, when he made his recommendations to revise the pensionary benefits, is not contemplating to make his recommendations retrospective. Otherwise, he would have taken financial implications of those recommendations and the impact thereof on the resources available for plan and other essential non plan expenditure of the State. For this reason also, we cannot direct the State Government to re 388 vise the gratuity benefit, which was already paid to these petitioners who retired prior to 1 4 1978. The Supreme Court has clearly stated in Nakara 's case that arrears are not required to be paid because to that extent the scheme is prospective. Similar is the case with regard to the case of gratuity that was accrued and paid prior to the stipulated day mentioned in the G.O. promulgating the Revised Pension Rules of 1980. " We fully concur with the view of the High Court. The upward revision of gratuity takes effect from the specified date (April 1, 1978) with prospective effect. The High Court has rightly understood and correctly applied the principle propounded by this Court in Nakara 's case, AIR 1983 S.C. 130. There is no illegality or unconstitutionality (from the platform of Article 14 of the Constitution of India) involved in providing for prospective operation from the specified date. Even if that part of the Notification which provides for enforcement with effect from the specified date is struck down the provision can but have prospective operation not retrospective operation. In that event (if the specified date line is effaced), it will operate only prospectively with effect from the date of issuance of the notification since it does not retrospectively apply to all those who have already retired before the said date. In order to make it retrospective so that it applies to all those who retired after the commencement of the Constitution on 26 January, 1950 and before the date of issuance of the notification on 26 March, 1980, the Court will have to re write the notification and introduce a provision to this effect saying in express terms that it shall operate retrospectively. Merely striking down (or effacing) the alleged offending portion whereby it is made effective from the specified date will not do. And this, the Court cannot do. Besides, giving prospective operation to such payments cannot by any stretch of imagination be condemned as offending Art 14. An illustration will make it clear. Improvements in pay scales by the very nature of things can be made prospectively so as to apply to only those who are in the employment on the date of the upward revision. Those who were in employment say in 1950, 1960 or 1970, lived, spent, and saved, on the basis of the then prevailing cost of living structure and pay scale structure, cannot invoke article 14 in order to claim the higher pay scale brought into force say, in 1980. If upward pay revision cannot be made prospectively on account of Article 14, perhaps no such revision would ever be made. Similar is the case with regard to gratuity which has already been paid to the petitioners on the then prevailing basis as it obtained at the time of their respective dates of retirement. The amount got crystallized on 389 the date of retirement on the basis of the salary drawn by him on the date of retirement. And it was already paid to them on that footing. The transaction is completed and closed. There is no scope for upward or downward revision in the context of upward of downward revision of the formula evolved later on in future unless the provision in this behalf expressly so provides restrospectively (downward revision may not be legally premissible even). It would be futile to contend that no upward revision of gratuity amount can be made in harmony with Article 14 unless it also provides for payment on the revised basis to all those who have already retired between the date of commencement of the Constitution in 1950, and the date of upward revision. There is therefore no escape from the conclusion that the High Court was perfectly right in repelling the petitioners ' plea in this behalf. For the sake of record we may mention that our attention was called to an order of a Division Bench of the High Court of Gujarat LPA 280 of 1983 dated 8.9.83 per P.D. Desai Acting C.J., which does not discuss the issues involved but is based on a concession said to have been made by the Advocate General who appeared for the State. And also to a decision of the Allahabad High Court, (M.P. Tandon vs State of U.P., and (Punjab & Haryana High Court (V.P. Gautama vs Union of India, A.I.R. SLJ [1984] (1) 120.) In none ot these decisions the relevant passage from D.S. Nakara vs Union of India, , was considered. Nor was the aspect regarding prospective operation considered on principle. The High Court considered it shocking and was carried away by the fact that an employee who retired even one day before the enforcement of the upward revision would not get the benefit if the specified date of enforcement was not effaced by striking down the relevant provision. But in all cases of prospective operation it would be so. Just as one who files a suit even one day after the expiry of limitation would lose his right to sue, one who retires even a day prior to enforcement of the upward revision would not get the benefit. This cannot be helped, there is nothing shocking in it unless one can say legislation can never be made prospective, and nothing turns on it. These are the reasons which impelled us to dismiss the Special Leave Petition on 18 July, 1986. A.P.J. Petition dismissed.

The Government Order No. 88 dated 26th March, 1980 provided that retirement gratuity may be 1/3rd of pay drawn at the time of retirement for every 6 monthly service subject to maximum of 20 months pay limited to Rs.30,000. This order in so far as gratuity is concerned is made effective from 1st April, 1978. The petitioners, erstwhile Government employees who had retired "before" April 1, 1978, filed petition under Article 226 in the High Court, contending that gratuity is a part and parcel of the pensionary benefits and the same cannot be looked separately from the other pensionary reliefs and therefore, they are also entitled to the benefit of gratuity retrospectively at the enhanced rate though they had retired before April 1, 1978 and had been paid gratuity at the then prevailing rate. On behalf of the State the petition was contested and it was contended that gratuity is something different from the other pensionary benefits like pension and family pension, which are continuing ones. The gratuity that accrued to the petitioners prior to 1.4.1978 was calculated on the then existing Rules and paid, and the pensioners who retired prior to 1.4.1978 form themselves into a distinct class for purposes of the payment of benefit of gratuity from the others who retired after 1.4.1978, the date from which, the revised pension rules are made applicable by the Government. The High Court dismissed the petition holding that the upward revision of gratuity takes effect from the specified date (April 1, 1978) with prospective effect. 384 Dismissing the Special Leave Petition of the Pensioners ' Association this Court, ^ HELD: 1. The upward revision of gratuity takes effect from the specified date (April 1, 1978) with 'prospective ' effect. The High Court has rightly understood and correctly applied the principle propounded by this Court in Nakara 's case, wherein it was held that no arrears are required to be paid because to that extent the scheme is prospective. [388B C] V.P. Gautama, IAS Retd. vs Union of India (S.L.J. 1984(1) 120), and M.P. Tandon vs State of U.P., [1984] Lab. I.C.677, referred to. D.S. Nakara vs Union of India, (A.I.R. 1983SC 130), relied upon. There is no illegality or unconstitutionality involved in providing for prospective operation from the specified date. Even if that part of the Notification which provides for enforcement with effect from the specified date is struck down the provision can but have prospective operation not retrospective operation. In that event it will operate only prospectively with effect from the date of issuance of the notification since it does not retrospectively apply to all those who had already retired before the said date. [388C E] 3. In order to make the notification retrospective so that it applies to all those who had retired after the commencement of the Constitution on 26 January, 1950 and before the date of issuance of the notification on 26 March 1980, the Court will have to re write the Notification and introduce a provision to this effect saying in express terms that it shall operate retrospectively. Merely striking down or effecing the alleged offending portion whereby it is made effective from the specified date will not do. And this, the Court cannot do. Besides, giving prospective operation to such payments cannot by any stretch of imagination be condemned as offending Article 14. [388D F] 4. Those who were in employment say in 1950, 1960 or 1970, lived, spent, and saved, on the basis of the them prevailing cost of living structure and pay scale structure, cannot invoke Article 14 in order to claim the higher pay scale brought into force say, in 1980. If upward pay revision cannot be made prospectively on account of Article 14, perhaps no such revision would ever be made. Similar is the case with regard to gratuity which has already been paid to the petitioners on the then prevailing basis as it obtaind at the time of their respective dates of retirement. And it was already paid to them on that footing. The transaction is completed and closed. [388F H; 389A]

l Leave Petition (Civil) No. 4460 of 1993. From the Judgment and Order dated 15.1.1993 of the Himachal Pradesh High Court in Civil Writ Petition No. 566 of 1990. Arun Jaitley and Maninder Singh for the Petitioner. The following Order of the Court was delivered: How statutory bodies waste public money in fruitless litigation to satisfy 479 misplaced ego is demonstrated by this petition. The opposite party was appointed as Sales Girl by the petitioner, a cooperative society registered under Cooperative Societies Act, running a Super Bazar in Shimla. When one of the managers came there on transfer, her trouble started. Apart from insult, humiliaton and harassment thrust on her, that manager terminated her services illegally without being authorised to do so and without obtaining permission of the Administrator and without giving any notice or hearing her. The opposite party who had been apprising her superiors of that manager 's misbehaviour and of her apprehensions that he was out to get rid of her although was assured not only of his good behaviour and security of her services, immediately took recourse to legal action. To her misfortune the Assistant Registrar decided her case after seven years. It was held by him that the order of termination was illegal, arbitrary and was passed without obtaining approval of the Administrator. He directed the petitioner to reinstate her but did not grant any back wages. Even with this order which was prejudicial to her the opposite party was satisfied but the ego of petitioner was hurt. For eight months the order was not implemented by the petitioner as it was contemplating to file the appeal. And when the petitioner succeeded in obtaining the order it informed the opposite party that her Joining Report could not be entertained. Since then the opposite party has been knocking at the door of the petitioner but she was made to approach the appellate authority, the revising authority, the High Court, the Labour Court and finally the High Court again as the petitioner did not succeed anywhere but went on filing appeal and revision forcing the opposite party to file cross appeal or revision or even writ for her back wages and other benefits. Not one authority, even in the cooperative department found in favour of petitioner. Yet the petitioner had the obstinacy not only to approach this Court but to place the blame of inordinate delay on adjudicatory process. Such obstinacy without the least regard of the financial implications could only be indulged by a public body like the petitioner as those entrusted to look after public bodies affairs do not have any personal involvement and the money that they squander in such litigation is not their own. Sri Arun Jaitley the learned senior counsel attempted to assail the finding recorded by the High Court and the Labour Court. Suffice it to say that the conclusions arrived at are not only well reasoned but are based on material on record and could not be demonstrated to be vitiated by any error of Law. Having failed to persuade us on merits the Learned counsel attempted to highlight the financial difficulty of the petitioner and placed reliance on Surendra Kumar Verma & Ors. vs Central Government Industrial Tribunal cum Labour Court New, Delhi & Another [1980]4 SCC 443 in support of the submission that 480 the Courts while directing payment of back wages should exercise discretion considering the financial viability of the employer. It was urged that the respondent has been pursuing her remedy for 16 years therefore the petitioner whose profit margin is very low and the overhead expenses are very high resulting in accumulation of losses for which financial assistance has been granted by State as well as the Central Government for rehabilitation subject to the condition that the amount shall not be utilised towards past debts, shall be rendered in serious predicament brought upon it by the respondent for which it is not responsible. Nothing is farther than truth. It was other way round. In fact it was the petitioner who had disputed, the finding of the Registrar, directing reinstatment without back wages, and made respondent to run from court to court. When the petitioner did not reinstate her and filed an appeal she too filed a cross appeal for back wages. It is more than apparent that it was the petitioner who was not complying with the orders passed by the authorities from time to time and was leaving no stone unturned to see that an illegal order passed by its officer was upheld. We, therefore, do not see any justification for exercising discretion in favour of such a litigant. Public money has been wasted due to adamant behaviour not only of the officer who terminated the services but also due to cantankerous attitude adoped by those responsible for pursuing the litigation before the one or the other authority. They have literally persecuted her. Despite unequal strenght the opposite party has managed to survive. We are informed that the opposite party has been reinstated. This was put forward as bonafide conduct of petitioner to persuade us to modify the order in respect of back wages. Facts speak otherwise. Working life of opposite party has been lost in this tortuous and painful litigation of more than twenty years. For such thoughtless acts of its officers the petitioner society has to suffer and pay an amount exceeding three lakhs is indeed pitiable. But considering the agony and suffering of the opposite party that amount cannot be a proper recompense. We, therefore, dismiss this petition as devoid of any merit and direct the petitioner to comply with the directions of the High Court within the time granted by it. We however leave it open to the society to replenish itself and recover the amount of back wages paid by it to the opposite party from the personal salary of the officers of the society who have been responsible for this endless litigation including the officer who was responsible for terminating the services of the opposite patty. We may clarify that the permission given, shall have nothing to do with the direction to pay the respondent her back wages. Step if any to recover the amount shall be taken only after payment is made to the opposite party as directed by the High Court. SLP dismissed.

The private respondent was appointed as sales girl with the petitioner. The new manager not only insulted, humiliated and he her, he also terminated her services. On ber plea, the Assistant Registrar who decided the case after seven years, held the Impugned order as Illegal, arbitrary and passed without obtaining the requisite approval. He ordered reinstatement of the private respondent but did am grant back wages. The petitioner Informed the private respondent that her joining report could not be entertained. The letter was forced to approach the appellate and revising authorities the labour court and finally the High Court for back wages and other benefits. The petitioner approached this court to assail well reasoned finding recorded by the High Court, without the least regard of the financial implications. Meanwhile as the petitioner was unable to persuade this courtes of the case, the petitioner made attempt to highlight the financial difficulties in payment of back wages. Surendra Kumar Varma and others vs Central Government Industrial Tribunal Cum Labour Court, New Delhi & Anr. ; , referred to. The petitioner urged that the private respondent had been pursuing the 478 ` remedy for 16 years. And the profit margin of the petitioner being very low and the overhead expenses high. The State and the Centre who granted financial assistance for rehabilitation subject to the condition that the amount be not paid towards past debts, would be rendered in serious predicament. On facts this court found that it was the petitioner who was not complying with the orders passed by the authorities from time to time, so there was no justification for exercising discretion in favour of the petitioner. Dismissing the SLP and upholding the order of the High Court, this Court, HELD: Public money has been wasted due to adamant behaviour not only of the Officer who terminated the services of the private respondent but also due to cantankerous attitude adopted by those who were responsible for pursuing the litigation, and literally persecuted her. Working life of the private respondent has been lost for more than twenty years. While considering the agony and suffering, the amount of back wages exceeding three lakhs could not be a proper recompense. And the reinstatement of the private respondent could not be considered as bonafide conduct for modification of the order of back wages. (480 D) Leaving it open to the petitioner to replenish itself and recover the amount of back wages from personal salary of its officers who were responsible for the endless litigation and for terminating the services of the private respondents this Court clarified that this permission shall have nothing to do with the direction and the step for recovery be taken only after payment of back wages to the private respondent. (480 G)

Criminal Appeal No. 104 of 1990. From the Judgment and Order dated 1.9. 1983 of the Punjab and Haryana High Court in Crl. A. No. 199 DB/83. B.S. Malik for the Appellants. Mahabir Singh for the Respondent. The Judgment of the Court was delivered by AHMADI, J. Special leave granted. The seven appellants before us were convicted by the learned Additional Sessions Judge, Sonepat on three counts and sentenced as under: (a) rigorous imprisonment for one year under Section 148, I.P.C.; (b) rigorous imprisonment for six months under Section 323/ 149, I.P.C.; and (c) imprisonment for life and a fine of Rs.200 under Section 302/149, I.P.C. All the said substantive sentences were directed to run concurrently. 514 The seven appellants preferred an appeal against the order of conviction and sentence passed by the learned Trial Judge. The High Court while dismissing their appeal clari fied that their convictions were on six counts and altered the fine awarded under Section 302/149, I.P.C. from Rs.200 to Rs.5,000 in respect of each appellant per count, i.e. Rs.30,000 per appellant. Being aggrieved by this enhancement of fine the appellants have preferred this appeal limited to the question of this enhancement only. Section 374 of the Code of Criminal Procedure ( 'the Code ' hereinafter) provides for appeals from conviction by a Sessions Judge or an Additional Sessions Judge to the High Court. Section 377 entitles the State Government to direct the Public Prosecutor to present an appeal to the High Court against the sentence on the ground of its inadequacy. Sub section 3 of Section 377 says that when an appeal has been filed against the sentence on the ground of its inadequacy, the High Court shall not enhance the sentence except after giving to the accused a reasonable opportunity of showing cause against such enhancement and while showing cause the accused may plead for his acquittal or for the reduction of the sentence. Admittedly no appeal was preferred by the State Government against the sentence imposed by the High Court on the conviction of the appellants under Section 302/149, I.P.C. Section 378 provides for an appeal against an order of acquittal. Section 386 enumerates the powers of the appellate court. The first proviso to that section states that the sentence shall not be enhanced unless the accused has had an opportunity of showing cause against such enhancement. Section 397 confers revisional powers on the High Court as well as the Sessions Court. It, inter alia, provides that the High Court may call for and examine the record of any proceeding before any inferior criminal court situate within its jurisdiction for the purposes of satisfy ing itself as to the correctness, legality or propriety of any finding, sentence or order recorded or passed and as to the regularity of any proceedings of any inferior court. Section 40 1 further provides that in the case of any pro ceedings, the record of which has been called for by itself or which otherwise comes to its knowledge, the High Court may, in its discretion, exercise any of the powers conferred on a Court of appeal by Sections 386, 389, 390 and 391 of the Code. Sub section 2 of Section 401 provides that no order under this Section shall be made to the prejudice of the accused or other person unless he has had an opportunity of being heard either personally or by Pleader in his own defence. Sub section 4 next provides that where under this Code an appeal lies and no appeal is brought, no proceeding by way of revision shall be entertained at the 515 instance of the party who could have appealed. It is clear from a conjoint reading of Section 377, 386, 397 and 401 that if the State Government is aggrieved about the inade quacy of the sentence it can prefer an appeal under Section 377(1) of the Code. The failure on the part of the State Government to prefer an appeal does not, however, preclude the High Court from exercising suo motu power of revision under Section 397 read with Section 40 1 of the Code since the High Court itself is empowered to call for the record of the proceeding of any court subordinate to it. Sub section 4 of Section 401 operates as a bar to the party which has a right to prefer an appeal but has failed to do so but that sub section cannot stand in the way of the High Court exer cising revisional jurisdiction suo motu. But before the High Court exercises its suo motu revisional jurisdiction to enhance the sentence, it is imperative that the convict is put on notice and is given an opportunity of being heard on the question of sentence either in person or through his advocate. The revisional jurisdiction cannot be exercised to the prejudice of the convict without putting him on guard that it is proposed to enhance the sentence imposed by the Trial Court. Now, in the present case the appeal was filed under Section 374(2) of the Code by the convicts against the order passed by the Additional Sessions Judge. No appeal was filed by the State under Section 377( 1) of the Code against the sentence awarded by the trial court for the offence under Section 302/149 I.P.C. on the ground of its inadequacy. Nor did the High Court exercise suo motu revisional powers under Section 397 read with Section 401 of the Code. If the High Court was minded to enhance the sentence the proper course was to exercise suo motu powers under Section 397 read with Section 401 of the Code by issuing notice of enhancement and heating the convicts on the question of inadequacy of sen tence. Without following such procedure it was not open to the High Court in the appeal filed by the convicts to en hance the sentence by enhancing the fine. The High Court clearly acted without jurisdiction. For the above reasons we are clearly of the opinion that the appeal must succeed. In the result we allow this appeal and set aside the order of the High court insofar as it enhances the sentence by enhancing the fine from Rs.200 to Rs.5,000 per count per appellant. In other words we restore the order of sentence passed by the Trial Court under Section 302/149, I.P.C. The additional fine, if paid, will be refunded. N.P.V. Appeal al lowed.

The appellants were convicted by the Additional Sessions Judge on three counts and sentenced to various terms of imprisonment and a fine of Rs.200 under Sections 148, 323/149 and 302/149 I.P.C. The appellants preferred an appeal against the order of conviction and sentence. Dis missing the appeal, the High Court, clarified that their convictions were on six counts and altered the fine awarded under Section 302/149 I.P.C. from Rs.200 to Rs.5,000 in respect of each appellant per count, i.e. Rs.30,000 per appellant. Hence the appellants preferred appeal, by special leave, in this Court, limited to the question of enhancement of fine only. Allowing the appeal, and setting aside the order of High Court enhancing the fine, this Court, HELD: It is clear from a conjoint reading of Sections 377, 386, 397 and 401 of Code of Criminal Procedure, 1973, that if the State Government is aggrieved about the inade quacy of the sentence, it can prefer an appeal under Section 377(1) of the Code. The failure on the part of the State Government to prefer an appeal does not, however, preclude the High Court from exercising suo motu power of revision under Section 397 read with Section 401 of the Code, since the High Court itself is empowered to call for the record of the proceeding of any court subordinate to it. But before the High Court can exercise its revisional jurisdiction to enhance the sentence, it is imperative that the convict is put on notice and given an opportunity of being heard on the question of sentence either in person or through his advo cate. The revisional jurisdiction cannot be exercised to the prejudice of the convict without putting him on guard that it is proposed to enhance the sentence imposed by the Trial Court. [515A D] 513 In the present case, the appeal was filed under Section 374(2) of the Code by the convicts against the order passed by the Additional Sessions Judge. No appeal was filed by the State under Section 377(1) of the Code against the sentence awarded by the trial court for the offence under Section 302/149, I.P.C. on the ground of its inadequacy. Nor did the High Court exercise suo motu revisional powers under Section 397 read with Section 401 of the Code. If the High Court was minded to enhance the sentence the proper course was to exercise suo motu powers under Section 397 read with Section 401 of the Code by issuing notice of enhancement and hearing the convicts on the question of inadequacy of sentence. Without following such procedure it was not open to the High Court in the appeal filed by the convicts to enhance the sentence by enhancing the fine. The High Court clearly acted without jurisdiction. [515D F]

Appeal No. 339/60. Appeal from the judgment and decree dated November 17, 1955, of the Andhra Pradesh High Court in A. section No. 51/1951. A. Banganadham Chetty, A. V. Rangam, A. Vedavalli and K. R. Chaudhri. for the appellants. B. Ganapathy Iyer, R. Thiagarajan and G. Gopalakrishnan, for the respondent No. I. 1962. December 12. The judgment of ' the Court was delivered by 997 MUDHOLKAR, J. This is an appeal by a certificate granted by the High Court of Andhra Pradesh under article 133 (1) (a) of the Constitution. The relevant facts arc these The plaintiff respondent Ramaswamy & Co who carry on business in tobacco at Guntur instituted a suit against the appellant firm which also carries on similar business at that place and its alleged partners Kurapati Venkata Mallayya and Mittapalli Abbayya, for the recovery of the price of 112 bales of DB tobacco strips (hereafter referred to as DB strips) sold to them on June 5, 1946, amounting to Rs. 14,099/ and interest thereon from the date of purchase to the date of suit. In addition, the respondent firm claimed interest from the date of suit to the date of realization. It is the respondent firm 's case that the tobacco weighed 28,196 pounds and that the appellant firm purchased it by agreeing to pay its price at 8 annas per pound. Further according to the respondent firm the appellant firm agreed to pay interest on the amount at 9% per annum. The appellant firm denied having purchased 112 bales of tobacco from the respondent firm and denied also having agreed to pay its price at annas per pound or at any other rate. They also denied the existence of any agreement to pay any interest. According to the appellant firm in May, 1946 it secured a contract to supply to the Russian Government 3,000 bales of inferior tobacco at the rate of 8 annas per pound. One Kottamasu Venkateswarlu (who was distantly 'related to the partners of the appellant firm) was managing partner of the respondent firm. This firm had some inferior tobacco and Venketashswarlu pressed the appellant firm to take over 112 bales of the tobacco from it and tender them towar ds the contract with the Russian Government saying that the appellent firm may deduct one 998 anna per pound from the price received from the Russian Government towards their expenses and commission. The appellant firm had reluctantly agreed to this request and despatched 97 out of the 112 bales to Kakinada after getting Agmark certificate with respect to them, with the assistance of Venkateswarlu The representative of the Russian Government, however, rejected the goods on the ground that they were of inferior quality. Five bales out of these 97 bales were rejected by the Agmark authorities after re inspection of the goods at Kakinada. Those bales were returned to Guntur along with other rejected bales which belonged to the appellant firm but they were consumed in an accidental fire in the godown of the a pellant firm. The remaining 92 bales are said to be apeal lying with the shipping agent at Kakinada and that as the tobacco is of very poor quality no purchaser had yet been found for it. Fifteen bales out of the 112 bales which had not been sent to Kakinada got damaged and had to be rebaled. As a result of the rebaling they were reduced to ten bales and these are still lying with the appellant firm, which the appellantfirm was willing to return to the respondent firm on its paying the godown charges. Thus, the main defence of the appellant firm is that it never purchased 112 bales of tobacco from the respondent firm and, therefore, the respondent firm could not sue it for the price of those bales. It may be mentioned that before the institution of the suit a Receiver had been appointed in another suit for realization of the debts due to the 'respondent firm The court before which the suit was pending had made an order on June 22, 1949 permitting the ]Receiver to collect the debts due to the respondentfirm. In pursuance of this order the Receiver Suryanarayana instituted the suit out of which this appeal arises, describing himself thus in the plaint: " 'I, Suryanarayana Garu, Receiver appointed 'in O.S. 999 275 of 1948 on the file of the District Munsif 's Court, Guntur". The appellant firm contended that the suit was untenable because a Receiver has no right to institute a suit in his own name and further that the Receiver had not been expressly authorised by the court to institute the suit in question. The appellantfirm also contended that the suit was barred by time. It specifically contended that the respondent firm was not entitled either to the alleged price or to any interest. The appellant firm further contended that Mittapalli Abbayya ceased to be a Partner of the firm since the vear 1942 because as a result of a partition between Abbayya and his son ., Abbayya 's interest in the appellant firm fell to the share of one of his sons, Kotilingam. In consequence of the plea taken by the appellant firm that the suit was not tenable the respondentfirm amended the plaint with the leave of the court on December 27, 1949 by describing the plaintiff as ""Messrs. Thondepu Ramaswami & Co., represented by Suryanarayana Garu receiver appointed in O.S. 275 of 1948 on the file of the District Munsif 's Court, Guntur" in place of the original "I. Suryanarayana Garu, Receiver appointed in O.S. 275 of 1948 on the file of the District Munsif 's Court, Guntur". Thereupon the appellant firm filed an amended written statement in which it contended that the amendment was made long after the period of limitation and that it does not cure the initial defect in the suit of having been filed by a person other than the one who was entitled to institute a suit and that consequently the suit was barred by limita. The trial court held that the respondent firm had established the contract alleged by it but that it had not established that the appellant firm had agreed to pay the price at the rate of 8 annas per pound. It, however, held that the price of tobacco 1000 was Rs. 5,639 3 0, but it, dismissed the suit on the ground that I, Suryanarayana was not entitled to institute a suit in his capacity as Receiver in 0. section 275 of 1948, that the amendment of the plaint was made beyond the period of limitation and that, therefore, the suit was barred by time. In appeal the High Court held that the Receiver was entitled to institute the suit having been authorised by the court to collect the debts of T. Ramaswami & Co., that at the most 'there was a misdescription of the plaintiff firm in the cause title of the suit which could be corrected any time and that consequently the suit was within time. It further held that the price of tobacco agreed to between the parties was 8 annas per pound and that the plaintiff was entitled to a decree for Rs. 14,098/ and interest at 6% p.a. from the date of delivery of the goods till realisation. The first point urged before us by Mr. Ranganadham Chetty on behalf of the appellant firm is that the High ' Court, as well as the Subordinate judge were in error in holding that the bales in question had been purchased by the appellant firm from the respondent firm. This, however, is a question of fact and since the two courts below have found against the appellant firm on this point this court would not ordinarily interfere with such a finding. Mr. Ranganadham Chetty, however, contended on the authority of the decision in Srimati Bibhabati Devi vs Kumur Ramendra Narayan Roy( ') that the practice of the court in appeals by special leave is not a castiron one and that it, would, therefore, be open to this Court to depart from it in, an appropriate case. The aforesaid decision was referred to by this Court in Srinivas Ram Kumar vs Mahabir Prasad (2 ) and it was pointed out that when the courts below have given concurrent findings on pure questions of fact, this court would not ordinarily interfere with them (1) (1946) L.R. 73 I.A. 246, 259. (2) (1951] S.C.R 277,281. 1001 and review the evidence for the third time unless there are exceptional circumstances justifying a departure from the normal practice. Learned counsel contended that this is an unusual case because the reasons given by the High Court for holding that the transaction was a sale are quite different from those given by the trial court and in fact one of the reasons given by the High Court proceeds on a view of an important piece of evidence which is diametrically opposite to that expressed by the trial court. Mr. Ringanadham 'Chetty pointed out that in support of its claim the respondent firm relied upon two entries in its account books Exs. A 13 and A 14, that these entries were not relied tin by the trial court, but the High Court has without giving any reason for regarding them as genuine acted upon them. What the trial court has said in para 14 of its judgment is as follows : " 'In order to establish the sale of 122 bales of flue cured virginia tobacco strips,, Ramaswami relies on certain entries in the account books of his firm. Exhibit A 13 is the katha on page 27 of the day book of Thondepu Ramaswami & Co., containing an entry in respect of 112 bales weighing 28, 196 pounds at Re 0 8 0 per pound and debiting a sum of Rs. 14,098/ . The words " 'Re. 0 8 0 per pound" are contai ned in the third line of the entry. The words "112 bales weighing 28.,196 pounds at Re. 0 8 0 per pound" appear to be written closely. The sum of Re. 14,098 appears in different ink. Exhibit A 14 is the katha of the 1st defendant firm found on page 111 of the corresponding, ledger of Thondepu Ramaswami & Co. On 5 6 1964 a sum of Rs. 14,098 was debited in respect of 112 bales of barn tobacco weighing 28 196 pounds at Re. 0 8 0 per pound. ' In the second line of the entry the price therefore (in Telugue) and the debit 1002 of the sum of Rs. 14,098are found. On 21st August, 1946 interest of Rs. 267 1 9 was added. Exhibit A 17 is the interest Katha of Messrs. Thoadepu Ramaswami & Co, Exhibit A 16 is the katha at page 41 of the day book of Thondepu Ramaswami & Co. The katha shows that on 21 8 1946 to balancing entries 21 8 1946 two balancing entries for interest of Rs. 267 13 6 were made in the day book. The entry on the right hand side has been scored out and Ramaswamy has not been able to explain why and under what circumstances the entry happens to be scored out. The entry on the left hand side however, was not scored out. The totals do not tally unless the sum of Rs. 267 13 6 is included in the aggegate sum mentioned on the right hand side on page 41. It has been commented on behalf of the defendants that Ramaswamy himself has no personal knowledge of the entries, that the clerks who made the entries in the account books have not been examined and that Exhibits A 13, A 14 and A 1 6 cannot be relied on in order to come to the conclusion that the transaction relating to 112 bales was a sale and only a sale. Though Ramaswamy was not present when the entries were made in the several registers of his firm, it is not disputed that the accounts have been maintained in the usual course of business. " ling with the question of price the trial court has ob served: " 'Much reliance cannot be placed on the rate mentioned in Exhibits A 13 and A 14 and the price has to be determined independently having regard to the fact that the price of tobacco depreciates gradually with its age. " If will thus be seen that the trial court has not rejected these entries outright but only rejected them in so far as they were intended to establish the price agreed to be paid to the respondent firm. 1003 Dealing with this matter the High Court has observed thus : " 'Exhibit A 13 is the entry in the day book of Thondepu Ramaswami & Co. under date 5 6 1946 wherein a sum of Rs. 14,098 is debited to the defendant firm in respect of 112 bales of tobacco weighing 286196 pounds at 8 annas per pound. Though the figures "Rs. 14,098" were written in a different ink from the rest of the entry this is not a suspicious circumstance because the rest of the entry which is in the same ink and which is written in a normal manner contains reference to the sale of 28,196 pounds at 8 annas per pound. The resultant total is entered in the column on the right hand side as Rs. 14,098. It may be that the figure of Rs. 14 098 was entered a: little later before the accounts for the day were closed. Exhibit A 14 is the corresponding ledger of Thondepu Ramaswami & Co. and the entries in the day book are duly incorporated in the ledger. " Then later on the High Court has observed "At the same time the entries in the regularly kept books of the plaintiff firm cannot be thrown overboard particularly when no challenge was made of their genuineness. " The High Court has also stated : ""It is apparent from Exhibit A 23 that the defendant firm was shown to be a debtor not merely with respect to Rs. 14,098 the price of 28,196 pounds but also in respect of the interest due upon the sum, and the plaintiff firm has paid income tax thereon." toto the High Court has given certain reasons and even though we may not agree with them it cannot be said that there is any unusual circumstance which would warrant our reviewing afresh the evidence on 1004 the point as to whether the transaction in question was a sale or not. Mr. Ranganadham Chetty next contended that the courts below have not borne in mind the true significance of the words ""no price" occurring in the entry relating to the 112 bales in question in the verification register exhibit A 28. The Entry reads thus "5 6 46 For 112 bales of Baru tobacco no price at Re. 0 8 0 per pound The entries were in Telugu and the actual words used are and according to Mr. Ranganadham Chetty they mean that there was no sale. The Courts below, however, which were conversant with the language, have understood the entry to mean "no price" and that is how the ' expression has been translated in the paper book and it is not open to Mr. Ranganadham Chetty to say that the meaning is otherwise than this. Mr. Chetty then contended that even accepting that the meaning is only " 'no price" the proper inference to be drawn is that there was no transaction of sale and that the rate of 8 annas per pound stated in the entry is given merely for valuing the 112 bales. That may be so but it does not negative the effect of the other entries which clearly point to the transaction being a sale. Some point was also sought to be made by Mr. Ranganadham Chetty from the fact that no copy of the transport permit required to be taken for the transfer of excisable articles from one bonded warehouse to another was placed on record. We fail to see the significance of this because the appellant firm admits that 112 bales of tobacco were actually received by it from the respondent firm. It will thus be seen that there are no exceptional circumstances or unusual reasons which would induce us to re examine the entire evidence on the point ourselves. We, therefore, decline to do so. 1005 The next question is whether the suit was in proper form and was within time. Though the case of section for the suit arose on June 5, 1945, it is admitted before us that the courts were closed on June 5, 1949 and the suit was filed on the day on which they reopened. It would, therefore, be within time if it was properly constituted on the date on which it was filed. In Jagat Parini Dasi vs Naba Gopal Chaki (1) which is the leading case on the point it was held by the Calcutta High Court that a court must authorise a Receiver to sue in his own name and a Receiver who is authorised to sue though not expressly in his own name, may do so by virtue of his appointment with full powers under section 503 of the Code of Civil Procedure (Act XIV of 1882). In coming to this conclusion the learned judges pointed out that though, the object and purpose of the appointment of a Receiver may be generally stated to be the Preservation of the subject matter of the litigation pending judicial determination of the rights of the parties it does not necessarily follow that if he is authorised to sue, he cannot sue in his own name. Then the learned judges pointed out : ,,Though he is in one sense a custodian of the property of the person, whom in certain respects he is made to supplant, there seems to be no reason why his power should not be held to be co extensive with his functions. It is clear that he cannot conveniently perform those functions, unless upon the theory that he has sufficient interest in the subject matter committed to him, to enable him to sue in respect thereof by virtue of his office, in his own name. On the whole, we are disposed to take the view that, although a receiver is not the assignee or beneficial owner of the property entrusted to his care, it is an incomplete and inaccurate statement of his relations to the property to say that (1) Cal. 305. 1006 he is merely its custodian, When a Court has taken property into its own charge and custody for the purpose of administration in accordance with the ultimate rights of the Parties to the litigation, it is in custodia legis. The title of the property for the time being, and for the purposes of the administration, may, in a sense, be said to be in the Court. The receiver is appointed for the benefit of all concerned; he is the representative of the Court, and of all Parties interested in the litigation, wherein he is appointed. He is the rightarm of the Court in exercising the jurisdiction invoked in such cases for administering the property; the Court can only administer through a receiver. For this reason; all suits to collect obtain possession of the property must be prosecuted by the receiver, and the proceeds received and controlled by him alone. If the suit has to be nominally prosecuted in the name of the true owners of the property, it is an inconvenient as well as useless form inconvenient, because in many cases, the title of the owners may be the subject matter of the litigation in which the receiver has been appointed useless, because the true owners have no discretion as to the institution of the suit, no control over its management, and no right to the possesion of the proceeds." (pp. 316 317) Later the learned judges pointed out, that for the time being and for the purpose of administration of the assets the real party interested in the litigation is the Receiver and, therefore, there is no reason why the suit could not be instituted in his own name. The learned Judges then referred to a number of cases in support of their conclusion. It seems to us that the view of the Calcutta High Court that a Receiver who is appointed with full powers to administer the property which is Custodia legis or 1007 who is expressly authorised by the court to institute a suit for collection of the assets is entitled to institute a suit in his own name provided he does so. in his capacity as a Receiver. If any property is in custodia legis the contesting parties cannot deal with it in an manner, and, therefore, there must be some authority competent to deal with it, in the interest of the parties themselves. A Receiver who is placed in charge of the property on behalf of a court can be the only appropriate person who could do so. His function cannot be Limited merely to the preservation of the property and it is open to a court if occasion demands, to confer upon him the power to take such steps including instituting suits in the interest of the parties themselves. Here apparently the Receiver was not a person with full powers but by its order dated June 26, 1949 the, court authorised him to collect debts, particularly as some debts were liable to get barred by time. The Receiver, therefore, had the right to institute the suit in question. It is, however, contended that the order does not say specifically that he should institute a suit. In our opinion, the authority given to the Receiver ",to collect the debts" is wide enough to empower the Receiver to take such legal steps as he thought necessary for collecting the debtsincluding instituting a suit. The suit as originally instituted, was thus perfectly competent. The High Court has observed that even assuming that it would have been more appropriate for the Receiver to show in the cause title that it was the firm which was the real plaintiff and that the firm was suing through him it was merely a case of misdescription and that the plaint could be amended at any time for the purpose of showing the correct description of the plaintiffs We agree with the High Court that where there is a case of misdescription of parties it is open to the court to allow an amendment of the plaint at any time and the question of limitation would not arise in such a case. 1008 [His Lordship then dealt with the point regarding the rate of interest.] x x x x x x x x x Accordingly we set aside the decree of the High Court, allow the appeal in part and pass a decree in favour of the respondent firm for Rs. 5,639/3/ with interest at 6 per cent per annum from the date of the transaction till realization. The respondent firm will proportionate costs throughout from the appellant firm, which would bear its own costs. Appeal allowed in part.

A Receiver authorised and appointed by a Court to collect the debts due to the plaintiff respondent instituted a suit against the appellant firm and its alleged partners for the recovery of the price of tobacco and interest thereon. The right of the receiver to institute a suit in his own name was challenged by the appellant. Thereupon the respondent firm amended the Plaint by describing the plaintiff as "M/s. T. R. & Co., represented by I. Surayanarayana Garu receiver appoin. ted in O.S. 275 of 1948 on the file of the District Munsiff 's Court Guntur. " The appellant firm amended the written statement and contended that the amendment of the plaint was timebarred, that it did not cure the initial defect in the suit and that consequently, the suit was barred by limitation. The trial court dismissed the suit on the ground that Suryanarayana was not entitled to institute a suit in his capacity as Receiver, that the amendment of the plaint was beyond time and that the suit was therefore time barred. On appeal the High 996 Court held that the Receiver was entitled to institute the suit, that at the most there was a misdescription of the plaintifffirm in the cause title of the suit which could be corrected any time, that consequently the suit was within time and that the plaintiff was entitled to a decree with interest from the date of delivery of the goods till realization. Held, that a Receiver invested with full powers to administer the property which is custodia legis or who is expressly authorised by the court to institute a suit for collection of the assets is entitled to institute a suit in his own name provided he does so in his capacity as a Receiver. His function cannot be limited merely to the preservation of the property and it is open to a court, if occasion demands, to confer upon him the power to take such steps including instituting suits in the interest of the parties themselves. The suit as originally instituted, was thus perfectly competent. The High Court rightly held, that where there is a case of misdescription of parties it is open to the court to allow an amendment of the plaint at any time and the question of limitation would not arise in such a case. Jagat Tarini Dasi vs Naba Gopal Chaki (1907) r. L. R. , relied on. Held, further that this court does not interfere with the concurrent findings of the courts below on a pure question of fact, unless there are exceptional circumstances or unusual reasons which induce it to re examine the entire evidence. Srimati Bibhabati Devi vs Kumar Ramendra Narayan Boy, (1946) L. R. 73 1. A. 246 and Sriniwas Ram Kumar vs Mahabir Prasad, ; , referred to.

Appeal No.180 of 1959. Appeal from the judgment and order dated June 30, 1955 of the former Nagpur High Court in Misc. First Appeal No. 162 of 1949. 80 634 N. C. Chatterjee and B. P. Maheshwari, for the appellant. G. C. Mathur, for the respondents. March 29. The Judgment of the Court was delivered by HIDAYATULLAH, J. This appeal, by certificate under articles 132(l) and 133(l)(c) of the Constitution, has been filed against an order of the High Court at Nagpur dated June 30, 1955. Though the facts necessary to decide the appeal lie within a comparatively narrow compass, the case itself has had a long and somewhat unique history. In July, 1922, the Municipal Committee, Khandwa, resolved to impose a tax on the trade of ginning and pressing cotton by means of steam, or mechanical process, and after sundry procedure, a notification was published on November 25, 1922 in the Central Provinces and Berar Gazette, imposing the tax. Certain traders including the appellant, affected by the tax, filed suits seeking injunction against the Municipal Committee on the ground that the tax was invalid and illegal. Meanwhile, the Municipal Committee had served notices on the present appellant, and demanded and recovered the tax for 1923 24. The appellant then filed a second suit for refund of the tax paid by her on the ground that the imposition of the tax was illegal and ultra vires. The suits had varying fortunes in the Courts in India, till they reached the Privy Council. The Judicial Committee by its first decision remitted the cases for additional evidence, while the appeals were kept pending. The decision of the Judicial Committee is reported in Radhakrishan Jaikishan vs Khandwa Municipal Committee (1). After the additional evidence was received, the Judicial Committee pronounced its decision, which is reported in Badhakishan Jaikishan vs Municipal Committee, Khandwa (9). The Judicial Committee held that the tax was not validly imposed by the Municipal Committee, and reversing the decree of the Judicial Commissioner, decreed the suits. (1) (1933) L.R. 611 A. 125. (2) 635 The Provincial Legislature then passed the Khandwa Ginning and Pressing Cotton Tax Validating Act 8 of 1938, validating, the tax. The Act contained only one operative section, which read as follows: "2. Notwithstanding anything contained in the Central Provinces Municipal Act, 1903, or the Central Province Municipalities Act, 1922, or any decree or order of a civil court, the tax on the trade of ginning and pressing cotton by means of steam or mechanical process within the limits of the Khandwa municipality which was imposed by Notification No. 2639 1298 VIII, dated the 21st November, 1922, shall be deemed to have been legally imposed from the date of its imposition to the date on which this Act comes into force. Explanation. All decrees or orders of a civil court directing a refund of the tax already recovered by the committee of the said municipality or restraining the committee from recovering the tax shall be deemed to have no legal effect. " The appellant had, in the meanwhile, applied for the execution of the decrees, and the Validating Act was pleaded in bar. This plea was upheld by the executing Court, but the High Court at Nagpur, on appeal, rejected it and ordered the executions to proceed. The decision of the High Court is reported in Firm Radhakishan vs Municipal Committee, Khandwa (1). The reason given by the High Court was that the Explanation, though not the operative part of the Validating Act, conflicted with 0. 45 R. 15 of the Code of Civil Procedure, and that the assent of the Governor General had not been obtained, as required by is. 107(2) of the Government of India Act, 1935. Meantime, the Provincial Legislature had been dissolved, and the Governor had assumed all the powers of the Provincial Legislature under section 93 of the Government of India Act,. The Governor, with the assent of the Governor General enacted the second Validating Act intituled the Khandwa Municipality (Validation of Tax) Act, 1941,(16 of 1941), which received the assent of the Governor Genera I on June (1) (1940) N.L.J. 638. 636 30, 1941, and was published in the C. P. and Berar Gazette on July 11, 1941. That Act, omitting parts not relevant here, read as follows: "2. The tax the imposition of which purported to be sanctioned in the Notification of the Local Government (Ministry of Local Self Government) No. 2639 1298 VIII, dated the 21st November 1922, shall be, and shall be deemed always to have been, validly recoverable by the Municipal Committee of Khandwa in respect of the period from the 21st November 1922 to the 31st March 1938 (both dates inclusive). Where the net sum recovered from any person before the commencement of this Act on account of the said tax is less than the aggregate of the sum recoverable from such person, the balance shall be payable to the said Municipal Committee on demand made at any time after the commencement of this Act and, if not paid within fifteen days from the date of the demand, shall be recoverable by any method available under the Central Provinces Municipalities Act,, 1922, for the recovery of a tax imposed thereunder or by such other method as the Provincial Government may by rule prescribe. For the purposes of section 3 the net sum recovered from any person means the aggregate sum recovered from such person less any sum refunded to him and less so much of the amount of any decree or order for the payment of money executed by him against the said Municipal Committee as represents an amount previously paid by him on account of the said tax. Nothing in this Act shall preclude the execution against the said Municipal Committee of any decree or order for the payment of money arising out of a payment on account of the said tax but upon the execution of such decree or order so much of the amount thereof as represents a sum previously paid on account of the said tax shall be payable to and recoverable by the said Municipal Committee in accordance with section 3. 6. The Khandwa Ginning and Pressing Cotton Tax Validating Act, 1938, is hereby repealed. " 637 The Provincial Government framed a rule, which, shortly stated, provided for the recovery of the IV amount by way of execution application made to the very Court, which executed the decree. The Municipal Committee deposited the decretal amount in Court, which was withdrawn by the appellant on furnishing security. On August 7, 1947, the Municipal Committee filed its application under the rule for execution of the decree. Objections were raised by the appellant, but were disallowed, and the Municipal Committee realised the amount of the tax from the surety. The appellant had raised many objections, but we are concerned with one only, viz., that the Act was ultra vires the Provincial Legislature and consequently the Governor, being repugnant to a. 142 A, which was introduced in the Government of India Act, 1935, and which imposed a limit of Rs. 50 on taxes on professions, trades and callings after March 31, 1939. On November 16,1949, an appeal was taken by the present appellant to the High Court at Nagpur. This appeal was heard by Sinha, C. J., and Mudholkar, J. (as they then were). Mudholkar, J. held that by the second Validating Act which was passed after March 31, 1939, the limit of Rs. 50 per annum imposed by the second sub section of section 142 A was exceeded, 'and that the Act was thus ultra vires, the Governor. Sinha C., J., was of the contrary opinion. The case was then laid before Deo, J., who agreed with Sinha, C. J., and the appeal was dismissed. The appellant then obtained the certificate, and filed this appeal. Section 142 A of the Government of India Act, 1935, is as follows: "142 A. (1) Notwithstanding anything in section one hundred of this Act, no Provincial Law relating to taxes for the benefit of a Province or of a municipality, district board, local board or other local authority therein in respect of professions, trades," callings or employments shall be invalid on the ground that it relates to a tax on income. (2) The total amount payable in respect of any 638 one person to the Province or to any one municipality, district board, local board, or other local authority in the Province by way of taxes on professions, trades, callings, and employments shall not, after the thirty first day of March nineteen hundred and thirty nine, exceed fifty rupees per annum: Provided that if in the financial year ending with that date there was in force in the case of any Province or any such municipality, board or authority a tax on professions, trades, callings, or employments the rate, or the maximum rate, of which exceeded fifty rupees per annum, the preceding provisions of this sub section shall, unless for the time being provision to the contrary is made by a law of the Federal Legislature, have effect in relation to that Province, municipality, board or authority as if for the reference to fifty rupees per annum there were substituted a reference to the rate or maximum rate, or such lower rate, if any, (being a rate greater than fifty rupees per annum) as may for the time being be fixed by a law of the Federal Legislature; and any law of the Federal Legislature made for any of the purposes of this proviso may be made either generally or in relation to any specified Provinces, municipalities, boards or authorities. (3) The fact that the Provincial Legislature has power to make laws as aforesaid with respect to taxes on professions, trades, callings and employments, shall not be construed as limiting, in relation to professions, trades, callings and employments, the generality of the entry in the Federal Legislative List relating to taxes on income." Simultaneously with the introduction of section 142 A, Entry No. 46 in the Provincial Legislative List, which had till then stood as "Taxes on professions, trades, callings and employments" was amended by the addition of the words "subject, however, to the provisions of section 142 A of this Act". The impugned Act was passed by the Governor under section 90 of the Government of India Act, 1935. Under sub section (3) of that section, it had the same force and 639 effect and was subject to disallowance in the same manner as an Act of the Provincial Legislature assent led to by the Governor. The impugned Act was enacted with the concurrence and assent of the Governor General and thus complied with all the formalities required for such enactment. The powers of the Provincial Legislatures under the Legislative Lists have been the subject of numerous decisions by the Federal Court and also by this Court. It has been pointed out that these powers are as large and plenary as those of Parliament itself. These powers, it has been held, include within themselves the power to make retrospective laws; and as pointed out by Gwyer, C.J. in The United Provinces vs Atiqa Begum (1), the burden of proving that Indian Legislatures "were subject to a strange and unusual prohibition against retrospective legislation lay upon those who asserted it". This has not been asserted in this case, as, indeed, it could not be, after the decision of the case cited by us. In the case before the Allahabad High Court, out of which the appeal before the Federal Court had arisen [sub nom Mst. Atiqa Begum vs U. P. (2)], it was held that retrospective legislation was not possible in view of the provisions of section 292 of the Government of India Act, 1935, which continued all law in force in British India immediately before the commencement of Part III of the Act, until altered or repealed or amended by a competent Legislature or other competent authority. This view was not accepted by the Federal Court, which held that section 292 of the Act did not prevent Legislatures in India from giving retrospective effect to measures passed by them. There have been numerous occasions on which retrospective laws were passed, which were upheld by the Federal Court and also by this Court. It is not necessary to cite instances, but we refer only to the decision in M. P. V. Sundararamier & Co. vs The State of Andhra Pradesh (3), where this Court approved the dictum of the Federal Court. Retrospective legislation being thus open to the (1) (2) A.I.R. (1940) All. 272. (3) ; 640 Provincial Legislatures, the Act of the Governor had the same force. Retrospective laws, it has been held, can validate an Act, which contains some defect in its enactment. Examples of Validating Acts which rendered inoperative, decrees or orders of the Court or alternatively made them valid and effective, are many. In Atiqa Begum 's case (1), the power of validating defective laws was held to be ancillary and subsidiary to the powers conferred by the Entries and to be included in those powers. Later, the Federal Court in Piare Dusadh,v. King Emperor (2) considered the matter fully, and held that the powers of the Governor General which were conterminous with those of the Central Legislature included the power of validation. The same can be said of the Provincial Legislatures and also of the Governor acting as a Legislature. The only question thus is whether the power to pass a retrospective and validating law was taken away by the enactment of section 142 A and the amendment of the Entry in the Government of India Act. It is on this point that the difference in the High Court arose. The amendment of the Entry is of no special significance, because it only subjects the otherwise plenary powers to the provisions of section 142 A. Apart from the implications arising from that section, the supremacy of the Legislature to pass retrospective and validating laws was unaffected. We have thus to see what section 142 A enacted and to what extent it trenched upon the powers of the Provincial Legislature and the Governor. Mr. N. C. Chatterjee, in arguing the case, adopted the line of reasoning of the minority view in the High Court. He pointed out that a. 142 A was enacted to achieve three purposes. The first was that it removed doubts whether the charge of tax on professions, etc., would be regarded as income tax. The second was that it put a limit upon the powers of the Provincial Legislature to enact a law imposing a tax in excess of rupees fifty after March 31, 1939;and thirdly it preserved only existing valid laws already in force, which imposed a tax in excess of the amount indicated. He (1) (2) 641 contended that the second sub section and the proviso covered the entire field, and a law passed after March 31, 1939, could not freshly impose a tax in excess of the limit and this was such a law. Under the scheme of the Government of India Act, 1935, income tax, though a Central levy, was, under section 138 (1), distributable among the Provinces and for which an elaborate scheme prepared by Sir Otto Niemyer was accepted and embodied in the Government of India (Distribution of Revenues) Order in Council, 1936. The Centre could levy a surcharge for federal purposes. Taxes on trades, professions and callings, which were taxes already leviable by the Provinces under Schedule 11 of the Rules made by the Governor General in Council under .s. 80A(3)(a) of the Government of India Act, were also included in the Provincial Legislative List as a source of revenue for the Provinces. It was, however, felt that these taxes might come into clash with tax on income in the Federal List, and also if unlimited in amount, might become a second tax on income to be levied by the Provinces. It was to remove these contingencies that section 142 A was enacted. Sub section (1) provided I ,hat, a tax on professions, etc., would not be invalid on the ground that it related to a tax on income. Sub section (3) was a counterpart of sub section (1), and provided that the, generality of the Entry in the Federal Legislative List relating to taxes on income would not be construed as in any way limited by the power of the Provincial Legislature to levy a tax on professions, etc. The fields of the two taxes were thus demarcated. No other implication arises from these two sub sections. It was also apprehended that under the (guise of taxes on professions, etc., the Provincial Legislatures might start their own scheme of a tax on income, thus subjecting incomes from professions etc., to an additional tax of the nature of income tax. A limit was therefore placed upon the amount which could be collected by way of tax on professions, etc., and that limit, was Rs. 50 per annum per person. The, second 642 sub section achieved this result. It was, however, realised that the tax being an old tax, there were laws under which the limit of Rs. 50 was already exceeded in relation to a Province, municipality, board or like authority, and the imposition of such a limit might displace their budgets after March 31, 1939. A proviso was, therefore, added to the second sub section that if in the financial year ending with the thirty first day of March, nineteen hundred and thirty nine there was in force in the case of any Province, etc., a tax on professions, trades, callings or employments the rate or the maximum rate of which exceeded Rs. 50 per annum, the provisions of the second sub section shall have effect, (unless for the time being provision to the contrary was made by a law of the Federal Legislature) as if instead of Rs. 50 per annum there was substituted a reference to the rate or maximum rate exceeding Rs. 50. Where no such law was passed by the Federal Legislature, the tax even in excess of Rs. 50 continued to be valid. There can be no doubt that if a law was passed after the amendment and sought to impose taxes on professions etc., for any period after March 31, 1939, it had to conform to the limit prescribed by section 142A (2). The prohibition in the second sub section operated to circumscribe the legislative power by putting a date line after which a tax in excess of Rs. 50 per annum per person for a period after the date line could not be collect id unless it came within the proviso. But neither sub section (2) nor the proviso speaks of a period prior to March 31, 1939. The sub section speaks only of "the total amount payable. after the thirty first day of March, nineteen hundred and thirty. nine". These words are important. They create a limit on the amount leviable as tax for a period after that date. But if a law was passed validating another which imposed a tax for a period prior to the date indicated, it would be taxing professions etc., in excess of Rs. 50 not after March 31, 1939, but before it. Neither the Entry nor the section either directly or indirectly prohibited this, nor did they create any limit for the prior period. The Validating Act, though 643 passed in 1941, can be read only as affecting a period for which there was no limit. If the sub section said that tax shall not be payable in excess of Rs. 50 without indicating the period or date, the argument would have some support, but it puts in a date, and the operation of the prohibition is confined to a period after that date. The Validating Act, being thus completely within the powers of the Governor, could remove retrospectively the defect in the ' earlier Act. Though it reimposed the tax from the date of the earlier Act, it took care to impose the tax for a period ending with March 31, 1938. The impugned Act did not need the support of the proviso, because it did not fall within the ban of the second sub section. In our opinion, the Validating Act of 1941 was within the powers of the Governor, and was a valid piece of legislation. The appeal fails, and is dismissed with costs. Appeal dismissed.

In 1922, the Municipal Committee, Khandwa imposed a tax on the trade of ginning and pressing cotton by means of steam or mechanical process. Certain suits were filed challenging the validity of the tax and ultimately in 1937, the Privy Council held that the tax had not been validly imposed. In 1941, the Governor enacted the Khandwa Municipality (Validation of Tax) Act, 1941, which sought to validate the tax imposed in 1922. In the meantime, section I42 A was introduced in the Government of India Act, 1935, sub section (2) Of which provided that the 'total amount payable in respect of any one person by way of taxes on professions, trades, callings and employments shall not, after March 31, 1939, exceed Rs. 50 per annum '. The appellant contended that the validating Act was hit by section 142 A(2) and to the extent that it imposed a tax above Rs. 50 per person per annum it was invalid. Held, that the Validating Act was not hit by section I42 A (2) Government of India Act, 1935. The powers of the Indian Legislatures included a power to pass retrospective and validating laws. Section 142 A(2) which put a limit on the amount of tax did not affect laws relating to a period prior to March 31, 1939, but affected only those relating to periods after that date. It circumscribed the legislative power by putting a date line after which a tax in excess of Rs. 50 for a period after the dateline could not be collected unless it came within the proviso. The Validating Act imposed the tax in excess of Rs. 5o not after March 31, 1939, but before it. The United Provinces vs Atiqa Begum, and Piare Dusadh vs King Emperor, [1944] F.C . R. 61, referred to.

Appeal No. 353 of 1959. Appeal from the judgment and order dated April 22, 1958, of the Punjab High Court (Circuit Bench) at Delhi in Civil Writ No. 257 D of 1957. M. C. Setalvad, Attorney General of India, section N. Andley, J. B. Dadachanji Rameshwar Nath and P. L. Vohra, for the Appellant. G. section Pathak, R. L. Anand and Janardan Sharma, for the respondent No. 2. 591 1960. November 22. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal on a certificate granted by the Punjab High Court. Sharda Singh (hereinafter called the respondent) was in the service of the appellant mills. On August 28, 1956, the respondent was transferred from the night shift to the day shift in accordance with para 9 of the Standing Orders governing the workmen in the appellant mills. At that time an industrial dispute was pending bet ween the appellant mills and their workmen. The transfer was to take effect from August 30, 1956; but the respondent failed to report for work in the day shift and was marked absent. On September 1, 1956, he submitted an application to the General Manager to the effect that he had reported for duty on August 30, at 10 30 p.m. and had worked during the whole night, but had not been marked present. He had again gone to the mills on the night of August 31, but was not allowed to work on the ground that he had been transferred to the day shift. He complained that he had been dealt with arbitrarily in order to harass him. Though he said that he had no objection to carrying out the orders, he requested the manager to intervene and save him from the high handed action taken against him, adding that the mills would be responsible for his wages for the days he was not allowed to work. On September 4, 1956, he made an application to the industrial tribunal, where the previous dispute was pending, under section 33 A of the , No. XIV of 1947, (hereinafter called the Act) and complained that he had been transferred without any rhyme or reason from one shift to another and that this amounted to alteration in the conditions of his service, which was prejudicial and detrimental to his interest. As this alteration was made against the provisions of section 33 of the Act, he prayed for necessary relief from the tribunal under section 33 A. On September 5, 1956, the General Manager replied to the letter of September 1, and told the respondent that his transfer from. one shift to the other had been ordered on 592 August 28, and he had been told to report for work in the day shift from August 30; but instead of obeying the order which was made in the normal course and report for work as directed he had deliberately disobeyed the order and reported for work on August 30 in the night shift. He was then ordered to leave and report for work in the day shift. He however did not even then report for work in the day shift and absented himself intentionally and thus disobeyed the order of transfer. The General Manager therefore called upon the respondent to show cause why disciplinary action should not be taken against him for wailfully refusing to obey the lawful orders of the departmental officers and he was asked to submit his explanation within 48 hours. The respondent submitted his explanation on September 7, 1956. Soon after it appears the appellant mills received notice of the application under section 33 A and they submitted a reply of it on October 5, 1956. Their case was that transfer from one shift to another was within the power of the management and could not be said to be an alteration in the terms and conditions of service to the prejudice of the workman and therefore the complaint under section 33 A was not maintainable. The appellant mills also pointed out that a domestic inquiry was being held into the subsequent conduct of the respondent and prayed that proceedings in the application under section 33 A should be stayed till the domestic inquiry was concluded. No action seems to have been taken on this complaint under section 33 A, for which the appellant mills might as they had prayed for stay However, the domestic inquiry continued and on February 25, be partly responsible of those proceedings. against the respondent 1957, the inquiry officer reported that t e charge of misconduct was proved. Thereupon the General Manager passed an order on March 5, 1957, that in view of the serious misconduct of the respondent and looking into his past records, he should be dismissed; but as an industrial dispute was pending then, the General Manager ordered that the permission of the industrial tribunal should be taken before the order of dismissal was 593 passed and an application should be made for seeking such permission under section 33 of the Act. In the meantime, a notification was issued on March 1, 1957, by which 10th March, 1957, was fixed for the coming into force of certain provisions of the Central Act, No. XXXVI of 1956, by which sections 33 and 33 A were amended. The amendment made a substantial change in section 33 and this change came into effect from March 10, 1957. The change was that the total ban on the employer against altering any condition of ser vice to the prejudice of workmen and against any action for misconduct was modified. The amended section provided that where an employer intended to take action in regard to any matter connected with the dispute or in regard to any misconduct connected with the dispute, he could only do so with the express permission in writing of the authority before which the dispute was pending; but where the matter in regard to which the employer wanted to take action in accordance with the Standing Orders applicable to a workman was not connected with the dispute or the misconduct for which action was proposed to be taken was not connected with the dispute, the employer could take such action as he thought proper, subject only to this that in case of discharge or dismissal one month 's wages should be paid and an application should be made to the tribunal before which the dispute was pending for approval of the action taken against the employee by the employer. In view of this change in the law, the appellant mills thought that as the misconduct of the respondent in the present case was not connected with the dispute then pending adjudication, they were entitled to dismiss him after paying him one month 's wages and applying for approval of the action taken by them. Consequently, no application was made to the tribunal for permission in accordance with the order of the General Manager of March 5, 1957, already referred to. Later, on April 2, 19579 an order of dismissal was passed by the General Manager after tendering one month 's wages to the respondent and an application was made to the authority concerned for approval of the action taken against the respondent. 594 Thereupon the respondent filed another application under section 33 A of the Act on April 9, 1957, in which he complained that the appellant mills had terminated his services without the express permission of the tribunal and that this was a contravention of the provisions of section 33 of the Act; he therefore prayed for necessary relief. On April 18, 1957, an interim order was passed by the tribunal on this application by which as a measure of interim relief, the appellant mills were ordered to permit the respondent to work with effect from April 19 and the respondent was directed to report for duty. It was also ordered that if the management failed to take the respondent back, the respondent would be paid his full wages with effect from April 19 after he had reported for duty. On May 6, 1957, however, the application dated April 9, 1957, was dismissed as defective and therefore the interim order of April 18 also came to an end. On the same day (namely, May 6, 1957), the respondent made another application under section 33 A in which he removed the defects and again complained that his dismissal on April 2, 1957, without the express previous permission of the tribunal was against section 33 and prayed for proper relief. It is this application which is pending at present and has not been disposed of, though more than three years have gone by. It is also not clear what has happened to the first application of September 4,1956, in which the respondent complained that his conditions of service had been altered to his prejudice by his transfer from one shift to another. Applications under section 33 and section 33 A of the Act should be disposed of quickly and it is a matter of regret that this matter is pending for over three years, though the appellant mills must also share the blame for this state of affairs ' However, the appellant mills gave a reply on May 14,1957, to the last application under section 33 A and objected that there was no breach of section 33 of the Act, their case being that the amended section 33 applied to the order of dismissal passed on April 2, 1957. Further, on the merits, the appellant mills ' case was that the dismissal was in the circumstances justified. 595 The matter came up before the tribunal on May 16, 1957. On this date, the tribunal again passed an interim order, which was to the effect that as a measure of interim relief, the respondent should be permitted to work from May 17 and the respondent was directed to report for duty. It was further ordered that in case the management failed to take him back, they would pay him his full wages with effect from the date he reported for duty. Thereupon the appellant mills filed a writ petition before the High Court. Their main contention before the High Court was two fold. In the first place it was urged that the tribunal had no jurisdiction to entertain an application under section 33 A of the Act in the circumstances of this case after the amended sections 33 and 33 A came into force from March 10, 1957. In the alternative it was contended that the tribunal had no jurisdiction to pass an interim order of reinstatement or in lieu thereof payment of full wages to the respondent even before considering the questions raised in the application under section 33 A on the merits. The High Court held on the first point that in view of section 30 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, No. XXXVI of 1956, the present case would be governed by section 33 as it was before the amendment and therefore the tribunal would have jurisdiction to entertain the complaint dated May 6, 1957, under section 33 A of the Act. On the second point, the High Court held that the order of the tribunal granting interim relief was within its jurisdiction and was justified. In consequence, the writ petition was dismissed. Thereupon the appellant mills applied and was granted a certificate by the High Court to appeal to this Court; and that is how the matter has come up before us. The same two points which were raised in the High Court have been urged before us. We are of opinion that it is not necessary in the present case to decide the first point because we have come to the conclusion that the interim order of May 16, 1957, is manifestly erroneous in law and cannot be supported. Apart from the question whether the tribunal had jurisdiction 596 to pass an interim order like this without making an interim award, (a point which was considered and left open by this Court in The Management of Hotel Imperial vs Hotel Workers ' Union (1)), we are of opinion that where the tribunal is dealing with an application under section 33 A of the Act and the question before it is whether an order of dismissal is against the provisions of section 33 it would be wrong in law for the tribunal to grant reinstatement or full wages in case the employer did not take the workman back in its service as an interim measure. It is clear that in case of a complaint under section 33 A based on dismissal against the provisions of section 33, the final order which the tribunal can pass in case it is in favour of the workman, would be for reinstatement. That final order would be passed only if the employer fails to justify the dismissal before the tribunal, either by showing that proper domestic inquiry was held which established the misconduct or in case no domestic inquiry was held by producing evidence before the tribunal to justify the dismissal: See Punjab National Bank Ltd. vs All India Punjab National Bank Employees ' Federation (2), where it was held that in an inquiry under section 33 A, the employee would not succeed in obtaining an order of reinstatement merely by proving contravention of section 33 by the employer. After such contravention is proved it would still be open to the employer to justify the impugned dismissal on the merits. That is a part of the dispute which the tribunal has to consider because the complaint made by the employee is to be treated as an industrial dispute and all the relevant aspects of the said dispute fall to be considered under section 33 A. Therefore, when a tribunal is considering a complaint under section 33 A and it has finally to decide whether an employee should be reinstated or not, it is not open to the tribunal to order reinstatement as an interim relief, for that would be giving the workman the very relief which he could get only if on a trial of the complaint the employer failed to justify the order of dismissal. The interim relief ordered in this case was that the work (1) ; (2) ; 597 man should be permitted to work: in other words he was ordered to be reinstated; in the alternative it was ordered that if the management did not take him back they should pay him his full wages. We are of opinion that such an order cannot be passed in law as an interim relief, for that would amount to giving the, respondent at the outset the relief to which he would be entitled only if the employer failed in the proceedings under section 33 A. As was pointed out in Hotel Imperial 's case (1),ordinarily, interim relief should not be the whole relief that the workmen would get if they succeeded finally. The order therefore of the tribunal in this case allowing reinstatement as an interim relief or in lieu thereof payment of full wages is manifestly erroneous and must therefore be set aside. We therefore allow the appeal, set aside the order of the High Court as well as of the tribunal dated May 16, 1957, granting interim relief. Learned counsel for the respondent submitted to us that we should grant some interim relief in case we came to the conclusion that the order of the tribunal should be set aside. In the circumstances of this case we do not think that interim relief to the respondent is justified hereafter. As we have pointed above, applications under sections 33 and 33 A should be dealt with expeditiously. We trust that the applications dated September 4, 1956, which appears to have been overlooked and of May 6, 1957, will now be dealt with expeditiously and finally disposed of by the tribunal, as all applications under section 33 A should be. In the circumstances we pass no order as to costs. Appeal allowed.

One Sharda Singh, respondent, who was an employee of the appellant mills was dismissed for disobeying the orders of the managing authority. He filed an application before the Industrial tribunal under section 33 A of the , contesting his dismissal on various grounds, whereupon the tribunal passed an order to the effect that as an interim measure the respondent be permitted to work in the appellant mills and if the management failed to take him back his full wages be paid from the date he reported for duty. The appellant mills then filed a Writ Petition before the High Court contesting the interim order of the Tribunal and the High Court held that the interim relief granted to the respondent was justified. On appeal by a certificate of the High Court, Held, that the interim order passed by the tribunal reinsta ting the respondent was erroneous. Such an interim relief could not be given by the Tribunal as it would amount to prejudging the respondents ' case and granting him the whole relief at the outset without deciding the legality of his dismissal after hearing the appellant employer. The Management, Hotel Imperial and Ors. vs Hotel Workers ' Union, ; , and Punjab National Bank vs All India Punjab National Bank Employees ' Federation, A.I.R. , referred to.

minal Appeal No. 121 of 1961. Appeal by special leave from the judgment and order dated May 26, 1961 of the Punjab High Court, Circuit Bench at Delhi in Criminal Revision No. 159 D of 1961. Nur ud din Ahmed and Naunit Lal, for the appellant. V. D. Mahajan and P. D. Menon for R. N. Sachthey, for the respondent. November 27. The judgment of the Court was delivered by SUBBA RAO, J. This appeal by special leave is directed against the order of the Punjab High Court dismissing the Revision petition filed against the order of the Additional Sessions judge, Delhi. The appellant entered India on May 9, 1956, on a Pakistan passport dated February 11, 1956. He had a visa endorsed on the said passport permitting him to stay in India for three months. Under that visa he had to leave India on or before August 8, 1956, As he failed to do SO., a notice under section 3 (2) of the as amended in 1957, hereinafter called the Act, was served on him on 562 November 19, 1959, by the Delhi Administration. By that notice he was asked to report his presence personally to the Foreigners Regional Registration Officer, Taj Barracks, janpath, New Delhi, between 11 A. M. to 12 noon daily and enter into a personal bond in the amount of Rs. 5,000/ with two sureties in the amount of Rs. 10,000/ each for the due, observance of ' the restriction imposed on his movements. The appellant did not comply with the requirements of the notice. Therefore he was prosecuted under section 14 of the Act for violating the provisions of section 3 in the Court of the Sub Divisional Magistrate, Delhi. The appellant pleaded in defence that the said notice was not served on him and that he was a citizen of India. The learned Magistrate held on the evidence that the said notice was served on him and that he was not a citizen of India but a foreigner within the meaning of that Act and that he had committed an offence, inasmuch as he did not comply with the provisions of the said notice. On those findings he convicted him under section 14 of the Act and sentenced him to six months ' rigorous im prisonment. On appeal the Sessions Judge, Delhi confirmed the findings of the Magistrate and dismissed the appeal filed by him. He held that the burden was upon the appellant to prove that he was not a foreigner and that he had failed to discharge the same. He also rejected the plea of the appellant 'viz. that as on the date he entered India, he was not a foreigner within the meaning of the definition of "foreigner ' as it then stood he could not be convicted, on the ground that be was prosecuted for an offence committed after the definition was amended. The High Court confirmed the conviction of the appellant and the sentence passed against him. Hence the appeal. The learned counsel Mr. Nur ud Din appearing for the appellant raised before us the following two points: (1) the appellant was not a foreigner 563 within the meaning of the definition of a foreigner as existed at the time he entered India, i. e. on May 9, 1956, and therefore the High Court went wrong in convicting him, and (2) the appellant is not a foreigner even under the amended definition To appreciate the first contention it will be convenient to read the relevant provisions of the Section 3 : "The Central Government may by order make provision, either generally or with respect to all foreigners or with respect to any particular foreigner or any prescribed class or des cription of foreigner, fir prohibiting, regulating or restricting the entry of foreigners into India or their departure therefrom or their presence or continued presence therein. (2)In particular and without prejudice to the generality of the foregoing power, orders made under this section may provide that the foreigner. . (a) x x x (b) x x x (c) x x x (d) x x x (e) shall comply with such conditions as may be prescribed or specified (i) requiting him to reside in a particular place; (ii) imposing any restrictions on his movements; 564 (iii), (iv), (V), (vi), (vii), (viii), (iX), (X) (f) shall enter into a bond with or without sureties for the due observance of, or as an alternative to the enforcement of any or all prescribed or specified restrictions or conditions: The definition of a foreigner as it stood in 1953 was 'Foreigner ' means a person who is not a natural born British subject as defined in sub sections 1 & 2 of section 1 of the British Nationality and Status of Aliens Act, 1914. Section I (1) of the British Nationality and Status of Aliens Act, 1914, is in these terms : 'The following persons shall be deemed to be natural born British subjects, namely, (a) any person born within His Majesty 's Dominion and allegiance. ' The definition of a foreigner was substituted by the Foreigners Laws (Amendment) Act, 1957 (11 of 1957) section 2 (a). This amendment came into force with effect from January 19, 1957. Under the said definition, ,foreigner ' means a person who is not a citizen of India. Section 14 is : 'If any person contravenes the provisions of this Act or of any order made thereunder, or any direction given in pursuance of this Act or such order, he shall be punished with imprisonment for a term which may extend to five years and shall also be liable to fine; and if such person has entered into a bond in pursuance of clause (f) of Sub section (2) of section 3, his bond shall be forefeited; and any person bound thereby shall pay the penalty thereof, or show cause to the satisfaction of the convicting Court why such penalty should not be paid. ' 565 The gist of the foregoing provisions relevant to the present inquiry may be stated thus : Under the definition of a foreigner as it stood in the Act in 1953 before the amendment of 1957, any person barn within His Majesty 's Dominion and allegiance was a citizen of India but after the amending Act 11 of 1957 which came into effect from january 19, 1957, a person who is not a citizen of India is a foreigner. After that date if an order is issued by the Central Government in exercise of powers conferred on it under section 3 of the Act directing a foreigner so defined and prescribing certain conditions for his stay, it is the duty of such a foreigner to obey the said order. If he did not, he would be committing an offence within the meaning of section 14 of the Act. In the light of the said provisions let us look at the facts of the present case. As aforesaid the appellant entered India in 1956 on a Pakistan passport, the visa endorsed on it enabled him to stay in India till August 8, 1956. The Delhi Administration made an order and served on him on November 19, 1959, imposing the restrictions on his stay. Admittedly the appellant did not comply with the said restrictions and therefore lie committed an offence within the meaning of section 14 of the Act. It is contended that as the appellant was not a foreigner at the time he made his entry into India, he could not be convicted on the basis he was a foreigner within the meaning of the definition of a foreigner as subsequently amended. There is a fallacy underlying in this argument. The appellant was certainly not a foreigner when he entered India under the definition of a foreigner as it then stood. In view of the amendment of the definition he became a foreigner after January 19, 1957. He could not be convicted for an offence for an act done by him before the amendment on the basis he was a 566 foreigner ; for instance an act done by him such as his entry into India or his noncompliance with the conditions of an order issued on him before the amendment on the foot that he was a foreigner. But the offence for which he is now charged is an act done by him in derogation of an order issued to him after the amendment. On the date when the Delhi administration served on him the notice imposing certain restrictions and directing him to comply with certain conditions for his stay he was a foreigner within the meaning of amended definition. On the basis of the existing law he committed an offence and it will be futile for him to contend that he was not a foreigner under the original definition. The legality of the act done by him must be judged on the basis of the existing law as the act was done subsequent to the amendment. Reliance is placed upon the decision of this court in Fida Hussain vs State of Uttar Pradesh (1) in support of the contention that as the appellant was not a foreigner when he made the entry, he could not be convicted on the ground he was a foreigner. But the facts of that case are different from those in the present appeal and that decision is clearly distinguishable. There a person was born at Allahabad at the time when it was his Majesty 's Dominion. * He had left India to Pakistan but returned on a passport granted by the Government of Pakistan on May 16, 1953. He had a visa endorsed on his passport by the Indian authorities permitting him to stay in India for three months and this permission was later extended up to November 1953. Under Paragraph 7 of the Foreigners Order 1948 issued under section 3 of the , every foreigner entering India on the authority of a visa shall obtain from the appropriate authority a permit indicating the period during which he is authorised to remain in India and shall, unless that period is extended, depart from India before its expiry. As the appellant stayed after November 15, 1953, without permission given 567 under that order, lie was prosecuted for breach of the said order. It would be seen from the said facts that the appellant therein was prosecuted for an offence committed by him before the Amending Act of 1.957 came into force on January 19, 1957. This court on the said facts held that the appellant therein could not be convicted for the breach of Paragraph 7 of the Foreigners Order as lie not being a. foreigner at that time could not have committed a breach thereof, but clearly this decision cannot apply to an offence committed by a person who falls within the amended definition of foreigner ', after the Amending Act came into force. Indeed this court in express terms left open that question at page 1523 "No question as to the effect of the amended definition on the appellant 's status fell for our decision in this case, for we were only concerned with his status in 1953. We would also point out that no order appears to have been made concerning the appellant under section 3(2) (c) and we arc not to be understood as deciding any question as to whether such an order could or could , not have been made against the appellant. " What has been left open in that decision is to be considered in the present case. The appellant who is 'a foreigner under the amended definition has committed a breach of an order served on him after the amended definition of a foreigner came to hold the field. The appellant therefore in disobeying the directions given to him, by the Delhi Administration his committed an offence within the meaning of section 14 of the Act. Even so it is contended that the appellant is an Indian citizen and therefore is not a foreigner within the meaning of the amended definition of a foreigner under the Act. Some of the relevant provisions of the Constitution and the Citizenship Act 57 of 1955 may conveniently be extracted. Article 5 of the Constitution says "At the commencement of this Constitution, 568 every person who has his domicile in the territory of India and (a) who was born in the territory of India; or (b) either of whose parents was born in the territory of India; or (c) who has been ordinarily resident of the territory of India for not less than five years immediately preceding such commencement, shall be a citizen of India. " Section 9 of the Indian is in these terms : "If in any case not falling under section 8 any question arises with reference to this Act or any order made or direction given thereunder, whether any person is or is not a foreigner. the onus of proving that such person is not a foreigner. shall, notwithstanding anything contained in the (1 of 1872) lie upon such person". Under article 5(a) of the Constitution the appellant cannot be a citizen of India unless he was born in the territory of India and had his domicile in the territory of India at the commencement of the Constitution. In this case the appellant claimed to be a citizen under article 5(a) of the Constitution. By reason of section 9 of the Foreigners ' Act whenever a question arises whether a person is or is not a foreigner, the onus of proving that he is not a foreigner lies upon him. The burden is therefore upon the appellant to establish that he is a citizen of India in the manner claimed by him and therefore he is not a foreigner. This court in Union of India vs Ghaus Mohammad (1) accepted this legal position and laid down at page 748 thus : "It does not seem to have (1) ; 569 been realised that the burden of proving that he was not a foreigner, was on the respondent and appears to have placed that burden on the Union. This was a wholly wrong approach to the question," Rightly throwing the onus on the appellant the Magistrate considered the evidence and came to the conclusion that the appellant had failed to prove that he was a citizen of India and therefore not a foreigner. The learned Additional Sessions judge after noticing that the onus was on the appellant considered the evidence both oral and documentary and came to the conclusion that the appellant had failed to discharge the onus. It cannot be and indeed is not suggested that the said finding is vitiated by any error of law, but it is contended that the Additional Sessions judge was not justified in ignoring the evidence of 'respectable witnesses who spoke to the fact that the appellant was born in India and continued to reside in India at the date of the commencement of the Constitution and thereafter. The learned Additional Sessions Judge as a Judge of fact considered the evidence in the light of probabilities and the documentary evidence and rejected the same as unworthy of credence. The High Court in revision refused to interfere with that finding. We do not see any permissible ground for interference with that finding in an appeal under article 136 of the Constitution. No other point is raised before us. The appeal fails and is dismissed.

The appellant entered India on May 9, 1956, on a Pakistani passport. He had a visa permitting him to stay in India for three months. He had to leave India on or before August 8, 1956. As he failed to do so, a notice under section 3 (2) of the , as amended in 1957, was served on him on November 19, 1959, by the Delhi Administration. As he did not comply with the requirements of the notice, he was prosecuted under section 14 of the and convicted. His appeal and revision were dismissed. All came to this court by special leave. His contention was that he was not a foreigner within the meaning of the definition of a foreigner as it existed at the time he entered India, and he was not a foreigner even under the amended definition. Held, that the appellant was a foreigner under the amended definition and he had committed a breach of the order served on him after the amended definition of foreigner came into force. In disobeying the directions given to him by the Delhi Administration, he had committed an offence within the meaning of section 14 of the . Before the amendment of the definition in 1957, a person born within His Majesty 's Dominion and owing allegiance was a citizen of India, but after the amendment in January, 1957 a person who was not a citizen of India became a foreigner. After that date, if an order was issued by the Central Government in exercise of powers conferred on it under section 3 of the Act, it was the duty of such a foreigner to obey that order and if he did not do so, he committed an offence within the meaning of section 14 of the Act. The appellant was certainly not a foreigner when he entered India, but in view of the amendment of the definition, he became a foreigner after January 19, 1957. He could not be convicted for an offence for an act done by him before the amendment on the 561 basis that he was a foreigner, but in the present case he had been punished for not complying with an order passed after the amendment. The burden of proving that he was not a foreigner was on the appellant and he had failed to discharge that burden. The legality of an act done by a person must be judged on the basis of the existing law at the time the act is done. Union of India vs Ghaus Mohammad, ; followed Fida Hussain vs State of Uttar Pradesh 11962] 1 S.C.R. 776, distinguished.

Appeal No. 538 of 1960. Appeal from the judgment and order dated September ' 3, 1958, of the Punjab High Court in Civil Reference No. 2 of 1956. B. Sen, D. Gupta and P. D. Menon for the appellant. The respondent did not appear. April 3. The Judgment of the Court was delivered by DAs GUPTA, J. In an appeal against the assessment of house tax of bungalow No. 127 B, Bank Road, Ambala Cantonment, by the assessment committee of the Cantonment Board, Ambala, three questions arose as regards the liability of the assessee on which the officer bearing the appeal entertained reasonable doubt and accordingly made a reference to the High Court of Punjab under a. 84 (2) of the , for the decision of these questions. Admittedly half of this Bungalow had been. appropriated under the provisions of the Cantonments (House Accommodation) Act No. VI of 1923 on a lease by the Central Government and was being used at the relevant time by some military officer for his residence. It was also admitted that the assessment list was signed originally by three of the four persons who formed the assessment committee and was signed by the fourth member a few days later. The appellate officer set out these circumstances in 198 his statement and then formulated the three questions thus .lm15 "1. Whether the occupation of the property by a Military Officer under the above circumstances amounts to user thereof for the public purpose. Whether the occupation of the Military officer of the portion of the Bungalow appropriated under Act No. 6 of 1923 amounts to its occupation by the Central Government, within the meaning of a. 99 (2)(6) of the . 3. Whether the authentication of the Assessment list in the present case is valid as required by the provisions of Section 69, ". The appellate officer who is required by section 84 (2) to state his own opinion on the points referred stated that in his opinion the occupation by the Military Officer, did not amount to user for a public purpose nor did it amount to occupation by the government and further that authentication of the assessment list was valid. The High Court answered the two questions in the affirmative and the third in the negative. In other words, the High Court 's opinion is that the occupation of the property by the Military Officer amounts to user or the public purpose an also amount to occupation by the Central Government within the meaning of section 99 (2) (f) of the and that the authentication was valid. Against the High Court 's decision on the second question the Cantonment Board has filed this appeal on the strength of a certificate granted by the High Court. 199 The assessee was not represented before us but we were taken through all the relevant provisions of law by Mr. Sen who appeared for the Cantonment Board. For a proper decision of the question in controversy it is necessary first to take note of the scheme of appropriation of houses under the Cantonments (House Accommodation) Act, No. VI of 1923. Under section 5 every house situate in a Cantonment is liable to appropriation by the Central Government on a, lease in the manner and subject to the conditions provided in the Act. Section 6 provides that (a) where a military officer stationed in the Cantonment or a President of a military mess in the Cantonment applies in writing to the officer commanding of the Station that he is unable to secure suitable accommodation by private agreement and no government property is available for the purpose and the Officer Commanding is satisfied of the truth of the facts stated or(b) the Officer Commanding is satisfied on enquiry that there is not in the cantonment a sufficient and assured supply of houses available at reasonable rates of rent by private agreement, the Officer Commanding may serve a notice on the owner of any house which appears to him to be suitable requiring him to permit the house to be inspected, measured and surveyed. Under section 7 if a Officer Commanding is satisfied thereafter that the house is suitable for occupation by a military officer or a military mess, he may by notice require the owner to execute a lease of the house to the Central Government; require the .existing occupier, if any, to vacate the house; and require the owner to execute the necessary repairs. The section further provides that on the expiry of the lease the house shall be re delivered to the owner in a state of reasonable repair. Section 11 of the Act provides that if a house is unoccupied, a notice under section 7 may require the owner to give possession of the same to the Officer Commanding within 21 days from the service of the notice and 200 if a house is occupied, a notice issued under section 7 shall not require its vacation in less than thirty days from the service of the notice. Section 12 provides that if the owner fails to give possession of a house to the Officer Commanding in pursuance of a notice issued under section 7, or if the existing occupier fails to vacate a house in pursuance of such a notice, the District Magistrate, shall enter the premises and enforce the surrender of the house. It is clear from this resume of some of the provisions of the Act that where as the appropriation can take place under the conditions mentioned in s.6" what happens on the appropriation having been made is that the house is made over to the possession of the Officer Commanding on behalf of the Central Government. What if; done with the house thereafter is not dealt with by the Act. Coming now to the provisions of the , we have to consider first section 65, which is in these words : "65. Save as otherwise expressly provided in the notification imposing the tax, every tax assessed on the annual value of buildings or lands or of both shall be leviable primarily upon the, actual occupier of the property upon which the said tax is I assessed, if he is the owner of the buildings or lands or holds them on a building or other lease granted by or on behalf of the government or the Board or on a building lease from any person. In any other case, the tax shall be primarily leviable as follows, namely a) if the property is let, upon the ' lessor; (b) if the property is sub let, upon the superior lessor; (c) if the property is unlet, upon the 201 person in whom the right to let the same rests. On failure to recover any sum due on account of such tax from the person primarily liable, there may be recovered from the occupier of any part of the buildings or lands in respect of which the tax is due such portion of the sum due as bears to the whole amount due the same ratio which the rent annually payable by such occupier bears to the aggregate amount of rent so payable in respect of the whole of the said buildings or lands, or to the aggregate amount of the letting value thereof, if any stated in the authenticated assessment list. An occupier who makes any payment for which he is not primarily liable under this section, in the absence of any contract to the contrary, be entitled to be reimbursed by the person primarily liable for the payment, and, if so entitled, may deduct the amount so paid from the amount of any rent from time to time becoming due from him to such person. " The right to impose the tax is conferred by a. 60. Section 99 (2) contains the provisions for exemption from the tax on property. It is in these words: "The following buildings and lands shall be exempt from any tax on property other than a tax imposed to cover the cost of specific services rendered by the Board, namely : (a) places set apart for public workshop and either actually so used for no other purpose; (b) buildings used for educational purposes 202 and public libraries, play grounds and dharam salas which are open to the public and from which no income is derived; (c) hospitals and dispensaries maintained wholly by charitable contributions; (d) burning and burial grounds, not being the property of the Government or a Board, which are controlled under the provisions of this Act; (e) buildings or lands vested in a Board; and ( f) any buildings or lands,used or acquired for the public service or for any public pur pose,which are the property of the State or in the occupation of the central or any State Government. The tax in the present case is not one imposed to cover the cost of specific services rendered by the Board and so if the property falls within any of the clauses mentioned in cis. (a) to (f) it will be entitled to exemption. We are not concerned, however, with cls. (a) to (e) as the only claim to exemption which has been made by the owner of the_ property is that it falls within el. The question is whether that claim is justified. It appears to us to be clear that to be entitled to the exemption under el. (f) the building or land must satisfy two conditions. First, that it has 'been used or acquired for public service or for public purpose, and secondly, that it is either the property of the State or in the occupation of the Central or any State Government. The finding of the High Court that the building was being used at .the relevant date for a public purpose is not disputed before us. That question therefore need not be further considered. What is disputed however is : Was it in the occupation of the Central 203 Government ? On behalf of the appellant, the Cantonment Board, Mr. Sen has strenuously urged that the portion of the building with which we are concerned in this appeal was in fact being occupied by a Military officer and such occupation is not occupation of the Government. It is to be made clear that while it is known that this portion of the building was appropriated by the government on lease under section 7 of the Cantonments ( House Accommodation) Act, it is not the appellant 's case that the occupation of the Military Officer was as a sub lessee of the government. Mr. Sen 's argument proceeded on the basis that the government being the lessee of this portion of the building permitted a Military Officer to occupy it. The question we have to consider is whether oil such occupation by the Military Officer the building ceased to be in ', ,he occupation of the Central Government, the lessee. It is worth noticing that while section 65 (1) speaks of actual occupation by the owner and makes the tax primarily leviable on the owner if he is the actual occupier, section 99(2) uses the words ((in the occupation of the Central or any State Government" and not "in the actual occupation of the Central or the State Government". Even so, it has been argued by Mr. Sen that the word "occupation" without anything more, should ordinarily be interpreted as actual occupation. While this may be correct, we find it difficult to agree that when a person, entitled to actual occupation by reason of his lease permits another to occupy it, then it ceases to be in the actual occupation of the person so permitting. Where the Central or the State Government after obtaining the lease under s.7 leases it out to any person, it is itself not entitled to actual occupation but has to put the sub lessee into occupation. In such a case it may be reasonably said that the government has ceased to be in occupation. 204 In the case where the government after taking the lease merely gives a licence to some person to come and live in it, it is entitled to take away the permission at any time and thus to come into possession itself. We can see no reason for thinking that in such a case the fact that the person to whom permission has been given is residing in the building, makes it anytheless the actual occupation of the government. If that was so, the fact that the Military Officer may be away for months together and the members of his family or his servants are residing would make the building cease to be in occupation of the Military Officer. That is on the face of it absurd. In our opinion, where the person entitled to occupy, permits some other person to be in the building, he is in actual occupation through such other person. Accordingly, we are of opinion that the building in question was in occupation of the Central Government through the Military Officer whom it has permitted to reside in it. The answers given by the High Court were therefore correct. The appeal is accordingly dismissed. But, as there was no appearance for the other side, there will be no order as to costs.

One half of bungalow No. 127 B, Bank Road, Ambala Cantt., was taken on lease by the Central Government and was being used by some Military Officer for his Residence The Assessment Committee of 'the Cantonment Board, Ambala, made an assessment of house tax but the assessment list was signed Originally by three out of four persons who formed the assessment committee and was signed by the fourth a few days later. The officer bearing the appeal entertained reasonable doubt and made a reference to the High Court under s.84(2) of the , for the decision of those questions. The questions referred to the High Court were : (1) Whether the occupation of the property by a Military Officer amounts to a user thereof for public purposes. (2) Whether the occupation of the Military Officer of the portion of the bungalow appropriated under Act VI of 1923 amounts to its occupation by the Central Government within the meaning of section 99(2)(f) of the Cantonment Act, 1924. (3) Whether the authentication of assessment list in the present form is valid as required by the provisions of section 96 of the . The High Court answered the two questions in the affirmative and the third in the negative. The opinion of the High Court was that the occupation of the property by the Military officer amounted to user for public purpose and also amounted to occupation by the Central Government and the authentication was valid. Against the decision of the High Court on the second questions the Cantonment Board went in appeal to the Supreme Court on the strength of a certificate granted by the High Court. 197 Held,, that the building in question was in occupation of the Central Government through the Military Officer whom it had permitted to reside in it. Where the person entitled to occupy, permits some other person to be in the building, he is in actual occupation through the other person.

s 4433,4642 57/78, 337 339, 757 58, 943, 291 and 1351 of 79,4103 and 6271/80,731 and 1943/81, 8274 and 9879/83 and C.A. NOS. 3108 3109/81 with W.P. NOS. 7941 and 7883/81. N. Natesan, A. T. M Sampath and P. N. Ramalingam for the petitioners in W.P. NOS. 4642 57 and 4433 of 1978 Dr. Y section Chitale, A T.M. Sampath, S.A. Rajan and P.N. Ramalingam for the petitioners in W.P. NOS. 337 339 of 1979. M. Natesan, and Raghuraman for the petitioner in W.P. No. 1943 of 1981. A.T.M. Sampath and P.N. Ramalingam for the petitioner in W.P. NOS. 757 58 of 1979. section Srinivasan for the petitioner in W.P. NO. 943 of 1979. P.R. Ramasesh for the petitioner in W.P. NO. 731 of 1982. A.T.M. Sampath and P.N. Ramalingam for the petitioner in W.P. NO. 7941 and 7883 of 82. A.T.M. Sampath and P.N. Ramalingam for the petitioner in W.P. NOS. 1357 58 of 79. P. Sinha for the petitioner in W.P. NO. 8274 of 83. P.N. Ramalingam for appellants in C. NOS. 3108 09 Of 81, 402 R.S. Ramamurthy, P. Govindan Nair, M.K.D. Namboodry, section Balakrishnan and E.C. Agarwala for the respondents in W.P. Nos. 6271/80 and 4642 57 and 4433 of 78. T.S. Krishnamoorthy, Mrs. section Gopalakrishnan and Gopal Subramanian for the respondents is W.P. No. 4103180. Shanker Ghosh, and D.N. Gupta for the respondents in W.P. No. 943/79. S.T. Desai, T.S. Krishnamurthy, A.V. Rangam, K. Ramamurthy and S.Balakrishnan for the respondents in W.P. No. 731182. Mohan Pandey and Ali Ahmed for the interveners in W.P. Nos. 4642 57 of 78. K. Ram Kumar for the respondent in C.A. Nos. 3108 3109/81 and W.P. Nos. 7941 and 7883/82. The Judgment of the Court was delivered by TULZAPURKAR, J. In these writ petitions and civil appeals by special leave the petitioners and appellants, who are tenants of several buildings belonging to the Hindu, Christian and Muslim religious public trusts as also to public charitable trusts in the State of Tamil Nadu, have challenged the legality and or validity of the total exemption granted to all such buildings from all the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (Tamil Act 18 of 1960) (for short 'the Act ') in exercise of the powers conferred upon the State Govt. under section 29 of the Act. Section 29 of the Act runs thus: "22. Exemptions Notwithstanding anything contained in this Act, the Government may, subject to such condition as they deem fit, by notification, exempt any buildings or class of buildings from all or any of the provisions of this Act" It appears that initially by G. O. Ms. No. 1998 (Home) dated 12th August, 1974, the State Government had, in exercise of its powers under section 29 exempted all the buildings owned by the Hindu Christian and Muslim religious trusts and charitable institutions from all the provisions of the Act; in other words the exemption was available to buildings of private religious trusts as also private charitable trusts. But later on by a fresh G. O. Ms. No. 2000 403 (Home) dated 16th August, 1976, the State Government, in super A session of the earlier Notification dated 12th August, 1974, confined the exemption to all buildings owned by the Hindu, Christian and Muslim religious public trusts and public charitable trusts. 'the relevant Notification which is being impugned herein runs thus: "G O. Ms . No. 2000, Home, 16th August, 1976) No. II (2)/HO/4520/76. In exercise of the powers conferred by section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (Tamil Nadu Act 18 of 1960), and in supersession of the Home Department Notification No. II (2)/HO/3811/74, dated the 12th August, 1974, published at page 444 of Part ll section 2 of the Tamil Nadu Government Gazette, dated the 12th August, 1974, the Governor of Tamil Nadu hereby exempts all the buildings owned by the Hindu, Christian and Muslim religious public trusts and public charitable trusts from all the provisions of the said Act. " The tenants have challenged the aforesaid Notification granting total exemption to all buildings belonging to the Hindu, Christian and Muslim religious public trusts and public charitable trusts from all the provisions of the Act on three grounds (a) that section 29 of the Act suffers from the vice of excessive delegation of legislative powers in as much as it vests in the State Government unguided and uncontrolled discretion in the matter of granting exemptions and is, therefore, violative of article 14 of the Constitution, (b) that the Notification dated 16th August, 1976 deprives the tenants of all such buildings (buildingsr belonging to Hindu, Christian and Muslim religious public trusts and public charitable trusts) of the equal protection of the beneficial provisions of the Act which is available to the tenants of other buildings and as such the same is discriminatory offending against the equal protection clause of article 14 and (c) that in any event the total exemption from all the provisions of the Act granted to such buildings, where partial exemption would have sufficed, is excessive, unwarranted and unsupportable. On the other hand, the State Govt. and the respondent landlords have refuted all the grounds on which the exemption has been challenged. It is denied that unguided and uncontrolled discretion has been conferred upon the State Govt. by section 29 of the Act and it is contended that enough guidance is afforded by the Preamble and the operative provisions of the Act for the exercise of the 404 discretionary power vested in the State Govt. It is pointed out that in P. J. Irani vs The State of Madras( ') an identical provision contained in the earlier enactment, namely, the Madras Buildings (Lease and Rent Control) Act, 1949 was upheld in the context of article 14 of the Constitution by this Court on the basis that the Preamble and the operative provisions of that Act gave sufficient guidance for the exercise of the discretionary power vested in the State Govt., namely, that the said power was to be exercised in cases where the protection given by the Act caused great hardship to the landlord or was the subject of abuse by the tenant; and it is urged that similar guidance is afforded by the Preamble and the operative provisions of the instant Act and section 29 cannot be said to be violative of article 14. The respondents have further contended that even the point regarding the constitutional validity of granting exemption to buildings belonging to charities, religious or secular in the context of the equal protection clause of article 14 could be said to have been concluded against the tenants of such buildings by the observations of this Court in P.J. Irani 's case (supra), it is pointed out that though in that case this Court was dealing with a Notification granting exemption in favour of a particular individual building, the Court has made observations which clearly indicate that where it is a case of granting exemption in favour of a class of buildings all that is required is that the classification must be based on rational grounds i.e. grounds germane to carry out the policy or the purpose of the Act and by way of illustration the Court has in terms stated that if such exemption were to be granted in favour of all buildings belonging to charities, religious or secular, such classification would be reasonable and proper, being based on intelligible differential having nexus to the object sought to be achieved by the exercise of power of exemption. Even otherwise, the State Govt. in their counter affidavit dated 10th February, 1981 and supplementary counter affidavit dated 24th September, 1983 have furnished material on the basis of which it has sought to justify the said exemption and it has been urged that the same conforms to and falls within the guidelines indicated in that decision governing the exercise of the power. The respondents have further sought to justify the grant of total exemption mainly on the basis that the freedom (right) to recover the reasonable market rent would be ineffective without the freedom to evict the tenant. As regards the attack directed against s.29 of the Act itself we would like to observe at the outset that though the challenge to the (1) 405 section under article 14 has been made in the petitions and the appeals A Counsel appearing for the petitioners and the appellants fairly stated before us, and in our view rightly, that in view of the decision of the Constitution Bench of this Court in P. J. Irani 's case (supra) dealing with an identical provision contained in the earlier Madras enactment (Madras Act XXV of 1949) the challenge cannot be sustained. Section 13 of the Madras Act XXV of 1949 with which this Court was concerned in that case ran thus: "Notwithstanding anything contained in this Act the State Government may by a notification in the Fort St. George Gazette exempt any building or class of buildings from all or any of the provisions of this Act." This Court upheld the constitutional validity of that provision in the context of the challenge thereto under article 14 on the basis that sufficient guidance was afforded by the Preamble and the operative provisions of the Act for the exercise of the discretionary power vested in the Government in the matter of granting exemptions to a building or class of buildings from all or any of the provisions of the Act. It may be stated that following the said decision this Court in the case of State of Madhya Pradesh vs Kanhaiyalal(l) did not find any infirmity in section 3(2) of the Madhya Pradesh Accommodation Control Act, 1961 (Act 41 of 1961) which ran thus: "The Government may, by notification exempt from all or any of the provisions of this Act any accommodation which is owned by any educational, religions or charitable institution or by any nursing or maternity home, the whole of the income derived from which is utilised for that institution or nursing home or maternity home." 'the challenge to section 29 of the instant Act, which was not pressed, has therefore to be rejected. Even so, since the Notification dated 16th August 1976 issued under section 29 has been challenged the guidance afforded by the Preamble and the operative provisions of the Act will have a bearing on the question Whether this particular exercise of the power conforms to such guidance or not and, therefore, it will be useful to advert briefly to the guidance so afforded. At the outset we would like to point out that the rationable behind the conferal of such power to (1) [1970] IS M.P.L.J. 973 406 grant exemptions or to make exceptions has been very succinetly elucidated by the American Supreme Court in the leading case of Gorieb vs Fox. (1) In that case the Court was concerned with an Ordinance which related to the establishment of a building line on public streets but it contained a reservation of power in the City Council to make exceptions and permit the erection of buildings closer to the street. It was contended that this reservation rendered the Ordinance invalid as denying the equal protection of the laws, Negativing the contention Sutherland J. speaking for the court, observed thus: "The proviso under which the Council acted also is attacked as violating the equal protection clause on the ground that such proviso enables the Council unfairly to discriminate between lot owners by fixing unequal distances from the street for the erection of buildings of the same character under like circumstances. The proviso evidently proceeds upon the consideration that an inflexible application of the Ordinance may under some circumstances result in unnecessary hardship In laying down a general rule, such as the one with which we are here concerned, the practical impossibility of anticipating in advance and provi ding in specific terms for every exceptional case which may arise, is apparent. And yet the inclusion of such cases may well result in great and needless hardship, entirely disproportionate to the good which will result from a literal enforcement of the general rule. Hence the wisdom and necessity here of reserving the authority to determine whether, in specific cases of need, exceptions may be made without subverting the general purposes of the ordinance. We think it entirely plain that the reservation of authority in the present ordinance to deal in a special manner with such exceptional cases is unassailable on constitutional grounds. " In our view the same rationale must apply to the conferal of such power on the State Government to grant exemptions or to make exceptions even in cases of beneficial legislations like the present enactment. In the matter of beneficial legislations also there are bound to be cases in which an inflexible application of the provisions of the enactment may result in unnecessary and undue hard (1) [1926] 71 Las Ed. 1228 at 1230. 407 ship not contemplated by the legislature. Obviously the power to grant exemptions under section 29 of the Act has been conferred not for making any discrimination between tenants and tenants but to avoid undue hardship or abuse of the beneficial provisions that may real it from uniform application of such provisions to cases which deserve different treatment. Of course, as observed by this Court in P. J. Irani 's case (supra) the power has to be exercised in accordance with the policy and object Or the enactment gatherable from the preamble as well as its operative provisions or as said in the American decision without subverting the general purposes of the enactment. As the preamble of the instant Act shows the three purposes, to achieve which it has been enacted are the same as those under the earlier enactment, the Madras Act XXV of 1949, namely, (1) the regulation of letting of residential and non residential buildings, (2) the control of rents of such buildings, and (3) the prevention of unreasonable eviction of tenants from such buildings, except that the enactment is of a comprehensive nature by way of amending and consolidating the rent control law obtaining in the State till then Unquestionably it is a piece of beneficial legislation intended to remedy the two evils of rack renting (exaction of exhorbitant rents) and unreasonable eviction generated by large scale of influx of population to big cities and urban areas in the post Second World War period creating acute shortage of accommodation in such areas and the enactment avowedly protects the rights of tenants in occupation of buildings in such areas from being charged unreasonable rents and from being unreasonably evicted therefore; it further protects their possession even after the determination of their contractual tenancies by enlarging the definition of a 'tenant ' so as to include persons who have held over after such determination. Sections 3 and 3 A deal with the regulation of letting while ss.4 to 8 effectuate the objective of controlling the rents and ss.l0 and 14 to 16 confine eviction of a tenant to stated grounds subject to certain terms, qualifications and/or reservations thereby preventing unreasonable eviction In other words a landlord 's freedom of contract to charge even the market rent (if it is in excess of 'fair rent ' as defined) and his freedom to evict a tenant on several grounds available to him either nuder his lease deed or the Transfer of Property Act have been curtailed to a large and substantial extent. At the same time the enactment contains other significant provisions which indicate that the legislature itself felt that there might be areas and cases where the two evils were neither prevalent nor apprehended and as such the landlord 's 408 freedom need not be curtailed at all, as also cases where attenuated freedom could be allowed to the landlord and limited protection be extended to the tenant. not instance, under s.1 (2) (a) (i) of the Act itself does not apply to the entire State but only to the city of Madras, the city of Madurai and to all Municipalities (i.e Municipal areas) which shows that non urban areas or rural areas are excluded from the operation of the Act, presumably because in such areas the evils of rack renting and unreasonable eviction do not obtain; and under the proviso there to power has been reserved to the Government to withdraw the application of the Act to any municipal areas or to the city of Madras or to the city of Madurai from such date as may be mentioned in the notification as also to reintroduce the Act in such areas where it has ceased to apply by reason of the notification issued under the proviso; similarly, s.1 (2) (c) confers powers on the Government to apply all or any of the provisions of the Act by notification to any other area in the state to which it has not already been made applicable by the Act itself and to cancel or modify any such notification. Again by the proviso to s.10 (1) the restrictions imposed by ss.10 and 14 to 16 (which enumerate the grounds and the circumstances under which alone eviction can be sought under the Act) have been made inapplicable to tenants in buildings of which the landlord is the Government. Similarly, under s.10 (3) (b) a much wider latitude to evict a tenant is afforded to landlords of religious, charitable, educational or other public institutions if possession is required for the purposes of such institutions, inasmuch as, unlike in the cases falling under section 10 (3)(a) (i) (ii) and (iii), there is no insistence that such landlords should not be occupying any other building of his own in the city, town or village concerned. In other words the legislature itself has made a rational classification of buildings belonging to Government and buildings belonging to religious, charitable, educational and other public institutions and the different treatment accorded to such buildings obviously proceeds on the well founded assumption that the Government as well as the landlords of such buildings are not expected to and would not indulge in rack renting or unreasonable eviction. These and similar other provisons crystalize the policy and purposes of the Act and furnish the requisite guidance which can legitimately govern the exercise of power confered on the State Government under s 29 of the Act. The guidance thus afforded may illustratively be indicated by stating that the power to grant exemptions or make exceptions could be legitimately exercised by the State Government in areas or cases where the mischief sought to be remedied by the Act is neither 409 prevalent nor apprehended as also in cases (individual or class of A cases) where a uniform or inflexible application of law is likely to result in unnecessary or undue hardship (here to landlords) or in cases where the beneficial provison is likely to be or is being abused by persons for whom it is intended (here the tenants). The question is whether in issuing the Notification dated 16th August 1976 the State Government has exercised the power in conformity with such guidance and the same is valid as not offending article 14 of the Constitution. We have already stated that the respondents have contended that the question of constitutional validity of granting exemption to buildings belonging to charities, religious or secular from rent control legislation as offending the equal protection clause of article 14 has been concluded by the observations made by this Court in P J. Irani 's case (supra) while Counsel for the petitioners and the appellants on the other hand have urged that it is not; according to Counsel for the petitioners and the appellants all that the observations made by this Court in that case decide is that the classification of buildings belonging to Hindu, Christian and Muslim religious public trusts as also to public charitable trusts could be regarded as a reasonable classification based on intelligible differentia but that test of nexus which is also required to be satisfied for purposes of article 14 has not been pronounced upon by this Court and this aspect is still open to argument We shall proceed on the basis that the question is res integra and consider whether the respondents, particularly the State Government have furnished proper material on the basis of which the exemption granted can be justified. lt cannot be disputed that public religious and charitable endowments or trusts constitute a well recognised distnict group inasmuch as they not only serve public purposes but the disbursement of their income is governed by the object with which they are created and buildings belonging to such public religious and charitable endowments or trusts clearly fall into a distinct class different from buildings owned by private landlords and as such their classification into one group done by the State Government while issuing the impugned notification must be regarded as having been based on an intelligible differentia. Counsel for the petitioners and the appellants also fairly conceded that such classification would be a rational one, more so in view of the observations made by this Court in that behalf in P.J. Irani 's case (supra). The question is whether the said classification has any nexus with the object with which the powers to H 410 grant exemptions has been conferred upon the State Government under section 29 of the Act. On this aspect of the matter before we go to the material furnished by the State Government on the basis of which such nexus is sought to be established it will be useful to refer to certain observations made by this Court in the case of State of Madhya Pradesh vs Kanhaiya Lal (supra) which afford a clear indication as to what kind of material would go to establish such nexus, The facts of that case were these. Respondent No. 4 in that case was a public trust registered under the Madhya Pradesh Public Trusts Act and it owned a house property, one portion whereof was occupied by girls school, the rest being let out to tenants. Since the rents issuing from the property were wholly utilised for the pure poses of the schools respondent No. 4 became entitled to get exemption from the provisions of the M. P. Accommodation Control Act under section 3(2) thereof for that house property. On an application made in that behalf by respondent No. 4 the State Government granted the exemption by issuing a notification under that provision. The notification was challenged on two grounds, (i) that section 3 (2) was void on the ground of the excessive delegation of Legislative powers to the State Government; (ii) that the notification itself was discriminatory as the grant of exemption was not germane to the policy of the Act. The High Court upheld the validity of section 3 (2) but struck down the notification as being discriminatory. This Court confirmed the High Court 's view eon both the points. While holding the notification bad on the ground that the exemption granted was not germane to the policy of the Act this Court observed thus: "In this case there is no affidavit by any officer who had anything to do with the order granting exemption. The returns filed on behalf of the State Government do not throw any light on this question. It would appear that in granting the exemption the State applied merely a rule of thumb and issued the notification on the basis of the assertion by the trust that the entire rental income from the property was being applied to meet the expenses of the trust. Such a statement on allows an institution to apply for exemption. It was not the case of the trust that they wanted to evict the tenants because they wanted the whole of the accommodation itself nor was it their plea that the income according to them was very low compared to prevailing rates of rent and that it was wholly inadequate for meeting the expenses of the trust. If grounds like these or other relevant grounds had 411 been alleged it would have been open to the State Government to consider the same and pass an order thereon. In our view the State Government did not apply its mind which it was required to do under the Act before issuing a notification and the return does not disclose any ground which was germane to the purposes of the Act to support the claim for exemption ." (Emphasis supplied) The above observations clearly indicate what kind of material the State Government is required to take into consideration which would justify the grant of an exemption in favour of a particular ill building or class of buildings. C Coming to the material furnished by the State Government on the basis of which the impugned exemption is sought to be justified it may be stated that in paragraph 4 of its Counter Affidavit dated 10.2.1981 Shri J. Ramachandran, Joint Secretary, Home Department, has stated: D "The prime object behind the grant of exemption to the buildings belonging to religious institutions is to enable J the institutions to get enhanced income by increasing their rents. The buildings were endowed to the public religious and charitable trusts for carrying out certain religious or charitable purposes. With the escalation of prices, the religious and charitable trusts are not in a position to carry out the endowment, if the income of the property is not increased suitably and this nullifies the specific purpose of endowment. " In para 13 the deponent has further stated: "As stated already, numerous representations were made to the Government about the plight of the temples and the public charities like poor feeding, etc. and the ridiculous position which is prevailing, and the Government on a consideration of all the aspects of the matter was fully satisfied that the tenants are fully exploiting the situation and the fixation of a fair rent under the Rent Control Act is no criterion at all and that it would cause immense in justice and would be highly oppressive so far as temples and religious endowments and public charities are concerned. lt is only in the context of such a serious predicament and 412 critical situation that the Government intervened and issued the notification under section 29 of the Act to relieve the hard ship and injustice. " It has also been pointed out that the procedure and machinery indicated in section 4 of the Act and the concerned Rules for fixing fair rent only yields on the total cost of the building together with the market value of the site, a gross return of 9 per cent for residential buildings and 12 per cent for non residential buildings which is very low as compared to the bank rate of interest and grossly inadequate when compared to the reasonable rents at the market rate obtaining in the locality or the neighbourhood (i.e., rent which a willing land lord will charge to a willing tenant) and it was a case of the tenants of all such buildings exploiting the situation arising from the beneficial provisions of the Act. In the supplementary counter affidavit dated the 24th September 1983, Shri N. Srinivasan, Deputy Secretary. Home Department, has categorically asserted that "in all these cases the Government was satisfied that the rent paid by the tenants was very low, meager and that the previsions of fixation of fair rent under the Act would not meet the ends of justice and the situation will still continue in which the tenant will be exploiting the situation and the helplessness of the public religious trusts and charitable institutions" and that, therefore, the Government felt that it was necessary to withdraw the protection given under the Act to the tenants of such buildings. It may be stated that no rejoinder affidavit has been filed on behalf of the writ petitioners or the appellants and as such the before said material furnished by the two counter affidavits and the averments made therein have gone unchallenged. In our view, the aforesaid material clearly shows that buildings belonging to such public religious and charitable endowments or trusts clearly fell into a class where undue hardship and injustice resulting to them from the uniform application of the beneficial provisions of the Act needed to be relieved and the exemption granted will have to be regarded as being germane to the policy and purpose of the Act. In other words the classification made has a clear nexus with the object with which the power to grant exemption has been conferred upon the State Government under section 29 of the Act. It may be stated that counsel for the petitioners and the apple lands during the course of the hearing placed reliance upon a decision of this Court in State of Rajasthan vs Mukanchand and Others(l) (1) ; 413 where the impugned part of section 2(c) of the Jagirdar 's Debt Reduction A Act (Rajasthan Act 9 of 1937) was held to be violative of Article 14 on the ground that the test of nexus between the classification made and the object sought to be achieved by the statute in question had not been satisfied. The ratio of the decision was that Jagirs having been deprived of their lands were entitled to the benefits of the Act providing for reduction of debts and it made no difference whether the debts were owed to the Government or local authority or other bodies mentioned in the impugned part of section 2(e) of the Act and such debts due to the Government, local authority and other bodies could not be excluded while granting the benefit of reduction of debts. The ratio, in our view, is clearly inapplicable to the facts of the instant case inasmuch as we have come to the conclusion that the classification of buildings made in the impugned notification has a clear nexus with the object with which the power to grant exemption has been conferred upon the State Government. It was next contended that If the main object of granting exemption to buildings belonging to public religious institutions or public charities was to enable these institutions to augment their income by increasing rentals of their buildings such object could have been achieved by granting exemption from these provisions of the Act which deal with the controlling of rents (ss 4 to 8 and the Rules made in that behalf) but a total exemption granted to them from all the provisions of the Act particularly those which prevent unreasonable eviction of tenants must be regarded as excessive and unwarranted. And in this behalf counsel for the petitioners and the appellants referred to a Saurashtra Notification No. AB/15(17)/54 55 dated the 27th December, 1954 issued by the State Government under s.4(3) of the Saurashtra Rent Control Act, 1954 where under partial exemptions p from changing only the standard rent subject to certain conditions was granted to buildings belonging to public trusts for religious and charitable purpose. It was pointed out that the Notification provided that the provisions of the Act except provisions in ss 23, 24 and 25 shall not, subject to conditions and terms specified in the schedule thereto apply to such buildings and term No. l in schedule A stated that no tenant of such premises to whom the same has been leased on or before 30th December, 1948 shall be evicted provided such tenant agrees to increase the monthly rent paid by him immediately before the said date by 50 per cent and does not allow, except for valid reasons, the rent amount due at any time to run in arrears for more than two consecutive months. " In other words the Saurashtra Notification was relied upon as an illustration where 414 partial exemption from the provisions of the Rent Control enactment subject to terms and conditions could be granted. Thus counsel urged that similarly in the instant case the State Government of Tamil Nadu could have given partial exemption to buildings belonging to public religious institutions and public charities only in the matter of 'fair rent ' and need not have taken away the protection available to the tenants under the provisions which prevented unreasonable eviction. In our view there is no substance in the contention. It cannot be disputed that the two objectives of the enactment, namely, to control rents and to prevent unreasonable eviction are interrelated and the provisions which subserve these objectives supplement each other. Tn P. J. Irani 's case (supra), Sarkar, J, has also observed at page 193 of the Report that "the purpose of the Act, quite clearly, is to prevent unreasonable eviction and also to control rent. These two purpose are intertwined. " it is obvious that if the trustees of the public religious trusts and public charities are to be given freedom to charge the normal market rent then to make that freedom effective it will be necessary to arm the trustees with the right to evict the tenants for non payment of such market rent. The State Government on material before it came to the conclusion that the 'fair 'rent ' fixed under the Act was unjust in case of such buildings and it was necessary to permit the trustees of such buildings to recover from their tenants reasonable market rent and if that be so non eviction when reasonable market rent is not paid would be unreasonable and if the market rent is paid by the tenants no trustee is going to evict them. It is, therefore, clear that granting total exemption cannot be regarded as excessive or unwarranted. Apart from this aspect of the matter it is conceivable that trustees of buildings belonging to such public religious institutions or public charities may desire eviction of their tenants for the purpose of carrying out major or substantial repairs or for the purpose of demolition and reconstruction and the State Government may have felt that the trustees of such buildings should be able to effect evictions without being required to fulfil other onerous conditions which must be complied with by private landlords when they seek evictions for such purpose. In our view, therefore, the total exemption granted to such buildings under the impugned notification is perfectly justified. The reliance on Saurashtra Notification, in our view, would be of no avail to the petitioners or the appellants. The manner in 415 which exemption from rent control provisions should be granted, whether it could be partial or total and if so on what terms and conditions would be matters for each State Government to decide in the light of the scheme and provisions of the concerned enactment and the facts and circumstances touching the classification made. And if the State of Madras has thought fit to grant the exemption in a particular manner by the impugned notification it will be difficult to find fault with it if the exemption so granted is not illegal or unconstitutional. It will be interesting to note that even under the Saurashtra Notification the term or condition contained in Schedule 'A ' thereto also makes the position clear that eviction may follow if the permitted enhanced rent is not paid or allowed to fall in arrears for two consecutive months by the tenant of such buildings belonging to public religious or charitable trusts. In the result the challenge to impugned notification fails and the writ petitions and the civil appeals are dismissed. All interim orders, if any, are vacated. where will be no order as to costs.

In exercise of the powers conferred by section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 the Government of Tamil Nadu issued a Notification G.O. Ms. 2000 (Homo Department) dated 16th August, 1976 exempting all the buildings owned by the Hindu, Christian and Muslim religious public trusts and public charitable trusts from all the provisions of the Act. The tenants challenged the Notification granting total exemption through the said Notification on three grounds namely; (a) that section 29 of the Act suffers from the vice of excessive delegation of legislative powers in as much as it vests in the State Government unguided and uncontrolled discretion in the matter of granting exemptions and is, therefore, violative of Article 14 of the Constitution; (b) that the Notification dated 16th August, 1976 deprives the tenants of all such buildings (belonging to Hindu. Christian and Muslim religious public trusts and public charitable trusts) of the equal protection of the beneficial provisions of the Act which is available to the tenants of other buildings and as such the same is discriminatory offending against the equal protection clause of Article 14; and (c) that in any event the total exemption from all the provisions of the Act granted to such buildings, where partial exemption would have sufficed is excessive, unwarranted and unsupportable. The State Government and the respondent landlords have refuted all the grounds on which the exemption has been challenged and further sought to justify the grant of total exemption mainly on the basis that the freedom (right) to recover the reasonable market rent would be ineffective without the freedom to evict the tenant. Dismissing the writ petitions and the civil appeals the Court, 399 ^ HELD: 1.1 In view of the decision of the Supreme Court in P.J. Irani vs The State of Madras, ; dealing with an identical provision contained in the earlier Madras enactment the challenge to the Constitutional validity of section 29 cannot be sustained. [405A B] P. J. Irani vs State of Madras, ; ; State of Madhya Pradesh vs Kanhaiyalal, 1970 (15) M.P.L.U SC 973 relied on. The rationale behind the conferal of such power to grant exemptions or to make exceptions is that an inflexible application of the provisions of the Act may under some circumstances result in unnecessary hardship entirely disproportionate to the good which will result from a literal enforcement of the Act and also the practical impossibility of anticipating in advance such hardship to such exceptional cases. In the matter of beneficial legislations also there are bound to be cases in which an inflexible application of the provisions of the enactment may result in unnecessary and undue hardship not contemplated by the legislature. The power to grant exemption under section 29 of the Act, therefore, has been conferred not for making any discrimination between tenants and tenants but to avoid undue hardship or abuse of the beneficial provisions that may result from uniform application of such provisions to cases which deserve different treatment. Of course, the power to grant exemption has to be exercised in accordance with the policy and object of the enactment gatherable from the preamble as well as its operative provisions without subverting the general purpose of the enactment. [406G H, 407A B] P. J. Irani vs State of Madras, ; relied on. Gorieb vs Fox, [1926] 71 Lawyers Edition at page 1230 quoted with approval . That Tamil Nadu Act is a piece of beneficial legislation intended to remedy the two evils of rackrenting (exaction of exhorbitant rents) and unreasonable eviction generated by a large scale of influx of population to big cities and urban areas in the post Second World War period creating acute shortage of accommodation in such areas and the enactment avowedly protects the rights of tenants in occupation of buildings in such areas from being charged unreasonable rents and from being unreasonably evicted therefrom. The Legislature itself has made a rational classification of buildings belonging to government and buildings belonging to religious, charitable, educational and other public institutions and the different treatment accorded to such buildings under section 10(3) (b) of the Act, which obviously proceeds on the well founded assumption that the government as well as the landlords of such buildings are not expected to and would not indulge in rack renting or unreasonable eviction. This and similar other provisions crystalize the policy and the purposes of the Act and furnish the requisite guidance which can legitimately govern the exercise of power conferred on the State Government under section 29 of the Act The power to grant exemptions or make exceptions could be legitimately exercised by the State Government in areas or cases where the mischief sought to be remedied by 400 the Act is neither prevalent nor apprehended as also in cases (individual or class of cases) where a uniform or inflexible application of the law is likely to result in unnecessary or undue hardship (here the landlords) or in cases where the beneficial provision is likely to be or is being abused by persons for whom it is intended there the tenants) [407D E, 408F H, 409A] 3.1. Public religious and charitable endowments or trusts constitute a well recognised distinct group in as much as they not only serve public purposes but the disbursement of their income is governed by the objects with which they are created and buildings belonging to such public religious and charitable endowments or trusts clearly fall into a distinct class different from buildings owned by private landlords. Therefore, their classification into one group done by the State Government while issuing the impugned notification must be regarded as having been based on an intelligible differentia. [409F G] 3.2. In view of the counter affidavit filed by the State Government dated 10 2 1981 and the supplementary counter affidavit dated 24th September, 1983 to the effect that the government was satisfied that "in all these cases, the rent paid by the tenants was very low, meagre and that the provisions of fixation of fair rent under the Act would not meet the ends of justice and the situation will still continue in which the tenant will be exploiting the situation and the helplessness of the public religious trusts and charitable institutions and hence they decided to withdraw the protection given under the Act to the tenants of such buildings", not having been challenged by way of rejoinder affidavits by the petitioners/appellants, it is clear that buildings belonging to such public religious and charitable endowments or trusts clearly fell into a class where undue hardship and injustice relating to them from the uniform application of the beneficial provisions of the Act needed to be relieved and the exemption granted will have to be regarded as being germane to the policy and purposes of the Act. In other words, the classification made has a clear nexus with the object with which the power to grant exemption has been conferred upon the State Government under section 29 of the Act. [411C, 412B G] State of Rajasthan vs Mukanchand and Others, ; ; held inapplicable. Granting total exemption cannot be regarded as excessive or unwarranted. The two objectives of the enactment, namely, to control rents and to prevent unreasonable eviction are interrelated and the provisions which subserve these objectives supplement each other It is obvious that if the trustees of the public religious trusts and public charities are to be given freedom to charge the normal market rent then to make that freedom effective it will be necessary to arm the trustees with the right to evict the tenants for non payment of such market rent. The State Government on materials before it came to the conclusion that the 'fair rent ' filled under the Act was unjust in case of such buildings and it was necessary to permit the trustees of such buildings to recover from their tenants reasonable market rent and if that be so non eviction when reasonable market rent is not paid would be unreasonable and if the market rent is paid by the 401 tenants no trustee is going to evict them. Further, it is conceivable that trustees of buildings belonging to such public religious institutions or public charities may desire eviction of their tenants for the purpose of carrying out major or substantial repairs or for the purpose of demolition and reconstruction and the State Government may have felt that the trustees of such buildings should be able to effect evictions without being required to fulfil other onerous conditions which must be complied with by private landlord when they seek evictions for such purpose. [413D E, 414C G] 3.4. The manner in which exemption from rent control provisions should be granted, whether it could be partial or total and if so on what terms and conditions would be matters for each State Government to decide in the light of the scheme and provisions of the concerned enactment and the facts and circumstances touching the classification made. And if the State of Madras has thought fit to grant the exemption in a particular manner by the impugned notification is cannot be faulted. if to exemption so granted is not illegal or unconstitutional. [415A B]

ON: Criminal Appeal No. 193 of 1957. Appeal by special leave from the judgment and order dated August 1, 1957, of the Bombay High Court in Criminal Appeal No. 365 of 1957, arising out of the judgment and order dated the November 28, 1956, of Joint Civil Judge, Junior Division, and Judicial Magistrate First Class, Broach, in Summary Case No. 57 of 1956. Rajni Patel and M. section K. Sastri, for the appellant. H. J. Umriyar, T. M. Sen and R. H. Dhebar, for the respondent. September 4. The Judgment of the Court was delivered by WANCHOO J. This appeal by special leave against the judgment of the Bombay High Court raises the question of the interpretation of sub sections (3) and (4) of section 36 of the Facts Act, (LXIII of 1948), (hereinafter called the Act). The brief facts necessary for the 656 purpose are these. The appellant is the occupier of the Gopal Mills Co. Ltd., Broach, which is a factory as defined in the Act. It appears that there is a pit in the factory in which dangerous fumes are likely to be present. This pit was securely covered as required by section 33(1) of the Act and no one was expected to go down into the pit for the normal work of the factory as the pit was worked by gadgets fixed nearby above the ground. It appears, however, that something went wrong with the machinery inside the pit on July 4, 1955. Fakirji Dhanjishaw was the person in charge of those who were working in the purification plant with which this pit is connected when the accident took place at about, 9 30 a. m. on July 4, 1955. It seems that when something went wrong with the machinery inside the pit, a labourer named Melia Dadla was asked to go down into it to attend to it and he went down without wearing suitable breathing apparatus and a belt securely attached to a rope, the free end of which should have been held by a person standing outside the confined space. The result was that Melia Dadla was seen overcome by poisonous gases and died. Thereafter Fakirji Dhanjishaw, Maganlal Gordhandas, Chunilal Bochar and Chhotalal Nathubbai went down into the pit without wearing breathing apparatus and were overpowered with poisonous gases and died one after the other. It is not clear when the superior officers in the mill were informed of this tragedy. But it appears that after the death of these five persons the Superintendent, Municipal Fire Brigade, was sent for with breathing apparatus and other appliances and he went down into the pit to save the dying persons; but be was also attacked by the fumes and became unconscious. The mill doctor and some other doctors also came but nothing could be done to revive the five persons who were dead. The matter was reported to the Inspector of Factories and he went and made enquiries. It was then found that suitable breathing apparatus, reviving apparatus, belts and ropes were not available anywhere in the factory and were not kept ready for instant use beside the confined space. Consequently, 657 the appellant was prosecuted as the occupier for the breach of section 36 (3) and (4) of the Act. The appellant took advantage of section 101 of the Act and filed a complaint against the manager section D. Vashistha and the engineer H. P. Tripathi. In view of this complaint of the appellant, the first question that the magistrate had to decide was whether the commission of the offence had been proved. If the commission of the offence was proved, the magistrate would have to consider whether the appellant could be discharged from liability if he proved to the magistrate 's satisfaction that he had used due diligence to enforce the Act and that the other two persons committed the offence in question without his knowledge, consent or connivance. In considering the question whether an offence had been committed, the magistrate had to interpret sub sections (3) and (4) of section 36 of the Act. He was of the view that no offence under section 36 (3) had been made out as the prosecution had failed to prove any permission, express or implied, to Fakirji Dhanjishaw and others to enter the pit. He was further of the view that no offence under section 36 (4) had been committed because no permission under sub section (3) having been granted to anybody to enter the pit, it was not necessary to keep the breathing apparatus etc., near the pit or anywhere else in the factory. He, therefore, held that no offence had been committed and acquitted the appellant as well as the manager and the engineer. There was an appeal by the State of Bombay to the High Court against the acquittal, of the appellant alone. The High Court disagreed with the interpretation of sub sections (3) and (4) of section 36 by the magistrate and held that " For attracting the application of sub section (3) it is not necessary that a positive act of obtaining permission must be done by a worker or a positive act of granting permission must be done by the occupier or manager. If the occupier or manager acquiesces in the entry, he permits the entry. If he connives at the entry, then also he permits the entry. If he fails to prevent the entry, then also he permits the entry. " 658 It went on to say The scheme of the Act, which is a welfare legislation, is to require an employer to take precautionary measures for safeguarding the lives of his workers, prudent or imprudent, rash or careful, against all possible danger while they are working on the premises of the factory. " It therefore held that as the appellant had not taken all reasonable steps to prevent the workers from entering the pit in case of the machinery getting out of order, he had failed to prevent the entry of the workers into the pit and therefore must be held in law to have permitted the entry and committed the breach of sub. section (3) of section 36. As to sub section (4) the High Court was of the view that it was not sufficient compliance with it to provide breathing apparatus etc. only after coming to know that some person was about to enter the confined space and that the apparatus must be kept ready for instant use and must be immediately available near the confined space not only to the person who might enter the confined space with permission but even to the person who might enter the confined space without permission. The High Court, therefore, set aside the acquittal of the appellant and directed that the appellant 's complaint against Vashistha and Tripathi should be first decided by the magistrate, (thus, in effect, setting aside the acquittal of Vashistha and Tripathi) and thereafter the magistrate should proceed to decide the case against the appellant in the light of the law laid down. There was then an application for a certificate to enable the appellant to appeal to this Court which was rejected. The appellant then applied to this Court for special leave to appeal which was granted; and that is how the matter has come up before us. The relevant part of section 36 is in these terms: " (3) No person in any factory shall enter or be permitted to enter any confined space such as is referred to in sub section (1) until all practicable measures have been taken to remove any fumes which may be present and to prevent any ingress of fumes and unless either 659 (a) a certificate in writing has been given by a competent person, based on a test carried out by himself, that the space is free from dangerous fumes ' and fit for persons to enter, or (b) the worker is wearing suitable breathing apparatus and a belt securely attached to a rope, the free end of which is held by a person standing outside the confined space. (4) Suitable breathing apparatus, reviving apparatus and belts and ropes shall in every factory be kept ready for instant use beside any such confined space as aforesaid which any person has entered, and all such apparatus shall be periodically examined and certified by a competent person to be fit for use; and a sufficient number of persons employed in every factory shall be trained and practised in the use of all such apparatus and in the method of restoring respiration. Taking sub section (3) first, the question that falls for consideration is the meaning of the words " be permitted to enter ". The contention on behalf of the State before the High Court was that these words cast an absolute duty on the occupier to prevent the entry of any person in a pit etc. of the kind mentioned in sub section (1) of section 36 and this seems to have been accepted by the High Court. Learned counsel for the appellant, however, urges that in the context of this provision, the duty cast on the occupier is not absolute and there must be some kind of permission, whether express or implied, to the person entering the pit etc. before the occupier is made liable. In other words, it is submitted that it will be for the court on the facts and circumstances of each case to infer whether there was permission, express or implied, of the occupier to the person who enters the pit etc. Mr. Umrigar appearing for the State of Bombay urges before us that this latter construction would make the provision liable to evasion by the occupier. According to him, this provision means that whenever anyone enters such a pit etc. the burden is cast on the employer to show that the entry was against the occupier 's instructions. He even went to the length of saying that if a worker 660 entered the pit in order to commit suicide, it would still be for the occupier to show that the entry was against his instructions and that he did all that he could to prevent it. In this connection he drew our attention to certain other sections in the Act where similar words are used, for example, sections 51, 52, 54, 60, 64, 67, 68, and 71. We do not think it necessary to consider these other sections in detail. It is enough to point out that there is one vital difference between the provisions of these other sections and the provision contained in section 36(3). Section 36(3) prohibits the worker from entering the pit etc. while these other sections have no such prohibition against the worker and cast the entire duty on the employer. Section 36(3) therefore will have to be construed in the context of the words used therein. It begins with prohibiting any person from entering any such pit etc. The primary prohibition therefore is of the person working in ' the factory and others and the effect of this prohibition is worked out in section 97 of the Act. Sub section (1) of section 97 provides that if a worker employed in a factory contravenes any provision of this Act imposing any duty or liability on workers, he shall be punishable with fine. Sub section (2) of this section then lays down that if a worker is convicted of an offence under sub section (1), the occupier or manager of the factory shall not be deemed to be guilty of an offence in respect of that contravention unless it is proved that he fails to take all reasonable measures for its prevention. Reading section 36(a) with section 97, it is clear that the prohibition of the worker against entering any such pit etc. is absolute and if any worker enters such a pit etc. he is guilty under section 97(1). In this case, if the five workers who are dead, were alive, they would have been guilty under section 97(1) for contravening section 36 (3) by entering the pit. Then section 97 (2) would come into operation and it would be for the prosecution to prove that the occupier or the manager had failed to take all reasonable measures for preventing the entry. The burden thus is on the prosecution to prove that the occupier or the manager had not taken all reasonable steps for preventing the entry and not on the occupier or the manager to prove that he 661 had taken all such reasonable steps. The Court will therefore have to consider all the facts and circumstances in a particular case to see if the burden has, been discharged by the prosecution. It is in this background that we have to consider the meaning to be given to the words " be permitted to enter " appearing in section 36 (3). It seems to us that in the circumstances these words do not cast an absolute duty on the employer to prevent the entry and the mere fact that a person has entered such a pit etc., would not by itself prove that he bad been permitted to enter. The Court will have to look into the facts and circumstances of the case to come to the conclusion whether the person who entered the pit was permitted to do so and mere entry would not necessarily lead to the conclusion that there was permission to enter, whether express or implied. The magistrate in this case seems to have thought that a positive act of obtaining permission must be done by the worker or a positive act of granting permission must be done by the occupier or the manager, though he has not said so in so many words. It is not necessary that there should be a positive act of obtaining permission by the worker or a positive act of granting permission by the occupier or the manager. What the court has to see is whether on the facts and circumstances of a particular case it will be reasonable to infer that the entry was with permission, whether express or implied. The High Court also, with respect, seems to have gone too far on the other side when it said that it was the duty of the employer to take all the precautionary measures for safeguarding the lives of his workers, prudent or imprudentrash or careful, against all possible danger whilethey are working on the premises of the factory. Thiswould imply that there was an absolute duty cast on the employer to prevent the entry irrespective of the considerations that might arise on the facts and circumstances of a particular case. The true view of section 36 (3), in our opinion, is that the primary duty is cast on the worker or any other person prohibiting his entry into any such pit etc. At the same time the occupier is also liable if his permission 84 662 to the entry, whether express or implied, can be inferred on the facts and circumstances of the case; IS but this permission cannot in all cases be inferred by the mere fact of the entry. The High Court has remanded the case to the magistrate for retrial and in that retrial the magistrate will proceed to consider the liability of the occupier in the light of the observations made by us on the construction of section 36 (3). Turning now to sub section (4), it will be found that it is in two parts. The first part provides that suitable breathing apparatus, reviving apparatus, belts and ropes shall in every factory be kept ready for instant use beside any such confined space as aforesaid which any person has entered. This to our mind means that if for any reason a person has to enter such confined space, the apparatus etc., shall be kept ready for instant use beside such space. The duty for keeping the apparatus ready beside the space arises only when a person is entering the confined space, obviously with the permission of the occupier or the manager. We do not think that sub section (4) contemplates that the apparatus etc., shall always be kept ready near the confined space whether there is any occasion for any person to enter it or not. The necessity of keeping the apparatus etc: ready, near the confined space arises when any person is about to enter such space, obviously with the permission of the employer. The second part of the section provides that all such apparatus shall be periodically examined and certified by a competent person to be fit for use and a sufficient number of persons employed in every factory shall be trained and practised in the use of all such apparatus and in the method of restoring respiration. This clearly shows that the apparatus etc., must always be available in the factory, though it need not be kept near the confined space till such time as some one is about to enter it. There will be no possibility of periodical examination and training of sufficient number of persons in the use of the apparatus unless the apparatus was always available in the factory. The duty cast by sub section (4) is absolute. So far as the first part is concerned, the duty of keeping the apparatus 663 ready for instant use near the confined space arises as soon as a person is about to enter it, obviously with the permission of the occupier. So far as the second part is concerned, it is the duty of the occupier to see that the apparatus is always available in the factory and is periodically examined and certified fit for use and a sufficient number of persons are trained in its use. The view taken by the magistrate of the effect of this section is not correct and the view taken by the High Court is right except that it is not necessary to keep the apparatus all the time near the confined space. The High Court has ordered retrial with respect to the contravention of sub section (4) also and the magistrate who now retries the case will do so in accordance with the construction of the sub section given by us. We have carefully refrained from saying anything on the facts of this case as there is going to be a retrial and it will be for the magistrate to consider all the facts and circumstances before coming to a decision one way or the other. The appeal is hereby dismissed. Appeal dismissed.

The appellant was the occupier of a factory where there was a pit in which dangerous fumes were likely to be present. The pit was securely covered and enclosed and no one was expected to go down into it for normal work as it was worked by gadgets fixed nearby above the ground. Something went wrong with the machinery inside the pit and five workers went down without wearing suitable breathing apparatus and without, wearing a belt securely attached to a rope the free end of which could be held by some person standing outside. All the workers were overcome by poisonous gases and died. It was found that suitable breathing apparatus, reviving apparatus, belts and ropes were not available anywhere in the factory and were not kept for ready use near the pit. The appellant was prosecuted as the occupier for breach of the provisions Of section 36(3) and (4) of the Indian . The trial Court held that no offence under section 36(3) had been made out and it was not proved that any permission, express or implied, had been given to the workmen to enter the pit, and I that no offence under section 36(4) had been made out because no permission having been given it was 'not necessary to keep the breathing apparatus etc., near the pit or anywhere else in the factory and consequently it acquitted the appellant. On appeal by the State, the High Court set aside the (1) [1952] S.C.R. $67. 655 acquittal and directed the trial Court to decide the case against the appellant in the light of the interpretation of the law made by the High Court. The High Court was of the view that as c, the appellant had failed to prevent the entry of the workers he must in law be held to have permitted the entry and committed breach Of section 36(3) ; and that it was not sufficient compliance with section 36(4) to provide breathing apparatus etc., only after coming to know that some person was about to enter the pit but that such apparatus must be immediately available at the pit at all times. Held, that section 36(3) did not cast an absolute duty on the occupier to prevent the entry into the pit and the mere fact that a person had entered the pit did not by itself prove that he had been "permitted to enter " within the meaning of that, subsection. The primary duty was on the worker prohibiting him from entering the pit. At the same time the occupier was also liable if his permission to the entry, whether express or implied, could be inferred from the facts and circumstances of the case. Held, further, that section 36(4) cast an absolute duty on the occupier to see that the breathing apparatus etc., was always available in the factory and was periodically examined and certified fit for use and a sufficient number of persons were trained in its use. But there was no duty to keep the apparatus at the pit at all times; such a duty arose when some person was about to enter the pit with the permission of the occupier.

ition No. 6816 of 1981. (Under Article 32 of the Constitution of India.) Kapil Sibal for the Petitioner. 274 B.D. Sharma for the Respondent. The following judgments were delivered BHAGWATI, J. The petitioner is the Director of a social action group called Social Work and Research Centre operating in and around Tilonia village in Ajmer district of the State of Rajasthan. The Social Work and Research Centre is duly registered society and since February 1972, it has been actively engaged in the work of upliftment of Scheduled Castes and Scheduled Tribes in different areas and particularly in and around Tilonia village. It operates through various groups and the present writ petition has been filed by the petitioner for the purpose of remedying gross violations of the which have been discovered by one such group. These violations, according to the petitioner, have been taking place in the following circumstances and they need to be redressed through judicial intervention. The Public Works Department of the State of Rajasthan is constructing Madanganj Harmara Road close to village Tilonia and according to the State Government, it is a part of famine relief work undertaken with a view to providing relief to persons affected by drought and scarcity conditions. The State Government in the Public Works Department has engaged a large number of workers for construction of this road and they include women belonging to Scheduled Castes. It is common ground that the minimum wage for a construction worker in Rajasthan is Rs. 7 per day and it was asserted on behalf of the petitioner and not disputed on behalf of the State Government that the Notification fixing the minimum wage of Rs. 7 per day does not specify any particular quantity of work to be turned out by the worker in order to be entitled to this minimum wage. Now the practice followed by the Public Works Department for engaging workers for the construction work is to issue an identity card to every resident in the famine affected area who registers himself with the Halka patwari and the identity card would show the number of members in the family of the card holder including males, females and children. Every resident in the famine affected area would be entitled to be employed in the famine relief work undertaken by the State Government on production of the identity card. This way a large number of workers including women belonging to Scheduled Castes are engaged in the construction work of the Madanganj Harmara Road. The workers employed in this construction work are divided into gangs of 20 persons or multiple 275 thereof and there is a separate muster roll for each such gang and the work done by it is measured every fortnight and payment is made by the Public Works Department to the Mate who is the leader of the gang according to the work turned out by such gang during each fortnight. The Public Work Department has fixed a certain norm of work to be turned out by each gang before the workmen belonging to such gang can claim the minimum wage of Rs. 7 per day with the result that if any particular gang turns out work according to the norm fixed by the Public Works Department the Mate would be paid such amount as would on distribution give a wage of Rs. 7/ per day to the workmen constituting such gang, but if less work is turned out by such gang, payment to be made to the mate of such gang would be proportionately reduced and in that event, the wage earned by each member of such gang would fall short of the minimum of Rs. 7 per day. The petitioner has stated in the writ petition that as a consequence of this practice followed by the Public Works Department workmen belonging to most of the gangs receive a wage very much less than the minimum wage of Rs. 7 per day as illustrated by a few instances set out in Annexure I to the writ petition. The petitioner has also averred that even within the gang itself, deferential payments are made to the workmen without any visible principle or norm and it is not uncommon that a worker who has put in full day 's work throughout the period of the fortnight, may get less than the minimum wage of Rs.7/ per day, while a worker who has put in much less work may get more than the proportionate wage due to him. This system of payment adopted by the Public Works Department created considerable discontent amongst the women workers belonging to Scheduled Castes who were engaged in this construction work and on 21st August 1981 about 200 to 300 such women workers approached the Social Work and Research Centre seeking advice as to what course of action should be adopted by them for the purpose of eliminating differential payments in wages and securing payment of minimum wage of Rs. 7 per day for each worker. Mrs. Aruna Roy, the Development Coordinator of the Social Work and Research Centre thereupon contacted Shri Atul Gupta, Asstt. Collector and both of them immediately proceeded to the site of the construction work. On their arrival at the site, an impromptu meeting took place where the women workers gave vent to their grievances which included inter alia complaint in regard to the "wide difference in respect of payments made by Mates to several gangs for the same category 276 of work performed" and pointed out that "differentials in payments also existed between the women workers working in the same gang and performing the same category of work. " Since these differential payments in wages were made by the Public Works Department to the gangs allegedly on the basis of the quantity of work turned out by each such gang and, according to the petitioner, there were even within the gang itself, differentials in payment of wages to the workers resulting in perpetuation of inequality, the petitioner in his capacity as Director of the Social Work and Research Centre filed the present writ petition challenging the system of payment of wages to the workers and seeking a writ of mandamus directing the State Government to "comply with the prescribed rates of minimum wages under the as applicable in the State of Rajasthan. " When the writ petition reached hearing before us, the State Government produced the Rajsthan Famine Relief Works Employees (Exemption from Labour Laws) Act, 1964 (hereinafter referred to as the Exemption Act) and relying upon this statute, the State Government contended that since the construction work of Madangang Harmara Road was a famine relief work, the was not applicable to employees engaged on this construction work by reason of section 3 of this Act. The Exemption Act is a Rajasthan statute enacted on 7th September 1964 and it is deemed to have come into force with effect from 1st July 1963. Section 2 clause (b) of this Act defines "famine relief works" to mean "works already started or which may hereafter be started by the State Government to provide relief to persons affected by drought and scarcity conditions" and "Labour Law" is defined in section 2 clause (c) to mean "any of the enactments as in force in Rajasthan relating to Labour and specified in the Schedule". The is one of the enactments specified in the Schedule to the Exemption Act. Then section 3 of the Exemption Act proceeds to enact that "Notwithstanding. .any such law." Section 4 of the Exemption Act excludes the jurisdiction of courts and provides that "no court shall take cognizance of any matter in respect of an employees of famine relief works under any Labour Law", which includes the . Now if the Exemption Act were a valid piece of legislation, it is obvious that no workman employed in a famine relief work would be entitled to complain that he is paid less than the minimum wage because the applicability of the would be 277 excluded by reason of section 3 of the Exemption Act and the women workers engaged in the construction work of Madanganj Harmara Road would have to be content with whatever wage is paid to them even though it be less than the minimum wage of Rs. 7 per day and their only complaint which would then survive would be that there is discrimination by reason of differential payment of wages to workmen doing the same quantity of work. The petitioner therefore sought leave to amend the writ petition by including a challenge to the constitutional validity of the Exemption Act and on such leave being granted, the petitioner filed an amended writ petition in this Court. The principal grounds on which the constitutionality of the Exemption Act was challenged were based on Articles 14 and 23 of the Constitution. I am, for reasons which I shall presently state, of the view that the challenge under Article 23 is well founded and it is therefore not necessary to investigate the facts relating to the violation of Article 14 and I accordingly propose to confine my judgment only to a consideration of the attack based on Article 23. If the Exemption Act is unconstitutional on the ground that it violates Article 23, it would be out of the way so far as the claim of the workmen for the minimum wage of Rs. 7 per day is concerned and the only question then would be whether the workmen are entitled to the minimum wage of Rs. 7 per day in any event or any deduction can be made from such minimum wage on the ground that the workmen have not turned out work according to the norm set down by the Public Works Department. This Court had occasion to consider the true meaning and effect of Article 23 in a judgment given on 18th September 1982 in writ petition No. 8143 of 1981 Peoples Union for Democratic Rights and Ors. vs Union of India and Ors. (1) The Court pointed out that the constitution makers, when they set out to frame the Constitution, found that the practice of 'forced labour ' constituted an ugly and shameful feature of our national life which cried for urgent attention and with a view to obliterating and wiping out of existence this revolting practice which was a relic of a feudal exploitative society totally incompatible with new egalitarian socio economic order which "We the people of India" were determined to build, they enacted Article 23 in the Chapter on Fundamental Rights. This Article, said the Court, is intended to eradicate the pernicious 278 practice of 'forced labour ' and to wipe it out altogether from the national scene and it is therefore not limited in its application against the State but it is also enforceable against any other person indulging in such practice. It is designed to protect the individual not only against the state but also against other private citizens. The Court observed that the expression "other similar forms of forced labour" in Article 23 is of the widest amplitude and on its, true interpretation it covers every possible form of forced labour begar or otherwise and it makes no difference whether the person forced to give his labour or service to another is remunerated or not. Even if remuneration is paid, labour supplied by a person would be hit by this Article if it is forced labour, that is, labour supplied not willingly but as a result of force or compulsion and the same would be the position even if forced labour supplied by a person has its origin in a contract of service. The Court then considered whether there would be any breach of Article 23 when a person provides labour or service to the State or to any other person and is paid less than the minimum wage for it and observed: "It is obvious that ordinarily no one would willingly supply labour or service to another for less than the minimum wage, when he knows that under the law he is entitled to get minimum for the labour or service provided by him. It may therefore be legitimately presumed that when a person provides labour or service to another against receipt of remuneration which is less than the minimum wage, he is acting under the force of some compulsion which drives him to work though he is paid less than what he is entitled under the law to receive. What Article 23 prohibits is 'forced labour ' that is labour or service which a person is forced to provide and 'force ' which would make such labour or service 'forced labour ' may arise in several ways. It may be physical force which may compel a person to provide labour or service to another or it may be forced exerted through a legal provision such as a provision for imprisonment or fine in case the employee fails to provide labour or service or it may even be compulsion arising from hunger and poverty, want and destitution. Any factor which deprives a person of a choice of alternatives and compels him to adopt one particular course of action may properly be regarded as 'force 'and if labour or service is compelled as a result of such 279 'force ',it would be 'forced labour '. Where a person is suffering from hunger or starvation, when he has no resources at all to fight disease or to feed his wife and children or even to hide their nakedness where utter grinding poverty has broken his back and reduced him to a state of helplessness and despair and where no other employment is available to alleviate the rigour of his poverty, he would have no choice but to accept any work that comes his way, even if the remuneration offered to him is less than the minimum wage. He would be in no position to bargain with the employer; he would have to accept what is offered to him. And in doing so he would be acting not as a free agent with a choice between alternatives but under the compulsion of economic circumstances and the labour or service provided by him would be clearly 'forced labour '. There is no reason why the word 'forced ' should be read in a narrow and restricted manner so as to be confined only to physical or legal 'force ' particularly when the national charter, its fundamental document has promised to build a new socialist republic where there will be socioeconomic justice for all and everyone shall have the right to work, to education and to adequate means of livelihood. The constitution makers have given us one of the most remarkable documents in history for ushering in a new socio economic order and the Constitution which they have forged for us has a social purpose and an economic mission and therefore every word or phrase in the constitution must be interpreted in a manner which would advance the socio economic objective of the Constitution. It is not unoften that in a capitalist society economic circumstances exert much greater pressure on an individual in driving him to a particular course of action than physical compulsion or force of legislative provision. The word 'force ' must therefore be construed to include not only physical or legal force but also force arising from the compulsion of economic circumstances which leaves no choice of alternatives to a person in want and compels him to provide labour or service even though the remuneration received for it is less than the minimum wage. Of course, if a person provides labour or service to another against receipt of the minimum wage, it would not be possible to say that the labour or service provided by him is 'forced 280 labour ' because he gets what he is entitled under law to receive. No inference can reasonably be drawn in such a case that he is forced to provide labour or service for the simple reason that he would be providing labour or service against receipt of what is lawfully payable to him just like any other person who is not under the force of any compulsion. We are therefore of the view that where a person provides labour or service to another for remuneration which is less than the minimum wage, the labour or service provided by him clearly falls within the scope and ambit of the words 'forced labour ' under Article 23, Such a person would be entitled to come to the court for enforcement of his fundamental right under Article 23 by asking the court to direct payment of the minimum wage to him so that the labour or service provided by him ceases to be 'forced labour ' and the breach of Article 23 is remedied. " I must, therefore hold consistently with this decision that where a person provides labour or service to another for remuneration which is less than the minimum wage,the labour or service provided by him clearly falls within the meaning of the words 'forced labour ' and attracts the condemnation of Article 23. Every person who provides labour or service to another is entitled at the least to the minimum wage and if anything less than the minimum wage is paid to him he can complain of violation of his fundamental right under Article 23 and ask the court to direct payment of the minimum wage to him so that the breach of Article 23 may be abated. If this be the correct position in law, it is difficult to see how the constitutional validity of the Exemption Act in so far as it excludes the applicability of the Minimum wages Act 1948 to the workmen employed in famine relief works can be sustained. Article 23, as pointed out above, mandates that no person shall be required or permitted to provide labour or service to another on payment of anything less than the minimum wage and if the Exemption Act, by excluding the applicability of the , provides that minimum wage may not be paid to a workman employed in any famine relief work, it would be clearly violative of Article 23. The respondent however contended that when the State undertakes famine relief work with 281 a view to providing help to the persons affected by drought and scarcity conditions, it would be difficult for the State to comply with the labour laws, because if the State were required to observe the laws, the potential of the State to provide employment to the affected persons would be crippled and the State would not be able to render help to the maximum number of affected persons and it was for this reason that the applicability of the was excluded in relation to workmen employed in famine relief work. This contention, plausible though it may seem is in, my opinion, unsustainable and cannot be accepted. When the State undertakes famine relies work it is no doubt true that it does so in order to provide relief to persons affected by drought and scarcity conditions but none the less it is work which enures for the benefit of the State representing the society and if labour or service is provided by the affected persons for carrying out such work, there is no reason why the State should pay anything less than the minimum wage to the affected persons. It is not as if a dole or bounty is given by the State to the affected persons in order to provide relief to them against drought and scarcity conditions nor is the work to be carried out by the affected persons worthless or useless to the society so that under the guise of providing work what the State in effect and substance seeks to do is to give dole or bounty to the affected persons. The court cannot proceed on the basis that the State would undertake by way of famine relief, work which is worthless and without utility for the society and indeed no democratic State which is administered by a sane and sensible Government would do so because it would be sheer waste of human labour and resource which can usefully be diverted into fruitful and productive channels leading to the welfare of the community and creation of national asset or wear. It is difficult to appreciate why the State should require the affected persons to provide labour or service on work which is of no use to the society, instead of simply distributing dole or bounty amongst the affected persons. There is no reason which the State should resort to such a camouflage. The presumption therefore must be that the work undertaken by the State by way of famine relief is useful to the society and productive in terms of creation of some asset or wealth and when the State exacts labour or service from the affected persons for carring out such work, for example, a bridge or a road, which has utilised for the society and which is going to augment the wealth of the State, there can be no justification for the State not to pay minimum wage to the affected persons. The State cannot be permitted to take advantage of the 282 helpless condition of the affected persons and extract labour or service from them on payment of less than the minimum wage. No work of utility and value can be allowed to be constructed on the blood and sweat of persons who are reduced to a state of helplessness on account of drought and scarcity conditions. The State cannot under the guise of helping these affected persons extract work of utility and value from them without paying them the minimum wage. Whenever any labour or service is taken by the State from any person, whether he be affected by drought and scarcity conditions or not, the State must pay, at the least, minimum wage to such person on pain of violation of Article 23 and the Exemption Act in so far as it excludes the applicability of the to workmen employed on famine relief work and permits payment of less than the minimum wage to such workmen, must be held to be invalid as offending the provisions of Article 23. The Exemption Act cannot in the circumstances be relied upon by the respondent as exempting it from the liability to pay minimum wage to the workmen engaged in the construction work of Madanganj Harmara Road. We must then proceed to consider whether on the facts the labour provided by the workers employed in the construction work of Madanganj Harmara Road could be said to be 'forced labour on the ground that they received wage less than Rs.7 per day. Now it was not disputed on behalf of the respondent that the wage paid to a gang of workmen depended upon the work turned out by a particular gang and if it was less than the norm fixed by the Public Works Department, the wage earned by each member of the gang would fall short of the minimum wage of Rs. 7 per day. But the argument was that this did not involve any breach of Article 23 because if any particular gang turned out work according to the norm fixed by the Public Works Department, the amount paid to the Mate of the gang was enough to give to each workman, on distribution, the minimum wage of Rs. 7 per day, and it was only if less work was turned out by the gang that the workmen would receive less than the minimum wage of Rs. 7 per day and this result would ensue not on account of any default on the part of the respondent but entirely because of the lethargy of the workmen constituting the gang. The workmen, said the respondent, could always earn the minimum wage of Rs. 7 per day by turning out work according to the norm fixed by the Public Works Department but if they did not do so and in consequence received less than the minimum 283 wage of Rs. 7 per day the respondent could not be held responsible for breach of the fundamental right conferred under article 23. This argument does, at first blush, appear to be attractive, but a closer scrutiny will reveal that it is unfounded. If we look at the Notification issued under the fixing the minimum wage of Rs. 7 per day for workmen employed in the construction work, it will be obvious that the minimum wage is fixed per day and not with reference to any particular quantity of work turned out by the workman during the day. Nor does the Notification empower the employer to fix any particular norm of work to be carried out by the workman with reference to which the minimum wage shall be paid by the employer. The minimum wage is not fixed on piece rate basis, so that a particular minimum wage would be payable only if a certain amount of work is turned out by the workman and if he turns out less work, then the minimum wage payable would be proportionately reduced. Here the minimum wage is fixed at Rs. 7 per day and that is the minimum wage which must be paid by the employer to the workman so long as the workman works throughout the working hours of the day for which he can lawfully be required to work. The employer may fix any norm he thinks fit specifying the quantity of work which must he turned out by the workman during the day, but if the workman does not turn out work in conformity with such norm, the employer cannot pay him anything less than the minimum wage. If the norm fixed by the employer is reasonable and the workman does not turn out work according to such norm, disciplinary action may be taken against the workman and in a given case he may ever be liable to be thrown out of employment, but he cannot be paid less than the minimum wage, unless, of course, the minimum wage fixed by the Notification under the is co related with the quantity of work to be turned out by the workman. Otherwise, it would be the easiest thing for the employer to fix an unreasonably high norm which a workman working diligently and efficiently during the day cannot possibly reach and thereby deprive the workman of the minimum wage payable to him. There can therefore be no doubt that in the present case the respondent was not entitled to pay less than the minimum wage to the workman belonging to a gang on the ground that such gang turned out work less than the norm fixed by the Public Works Department. I must therefore hold that each workman employed in the construction work of Madanganj Harmara Road was entitled to 284 receive the minimum wage of Rs. 7 per day from the respondent and the respondent was not entitled to reduce the wage payable to the workman below the minimum of Rs. 7 per day on the ground that the gang of which the workman was a member had turned out work less than the norm fixed by the Public Works Department. I would accordingly direct the respondent to pay to each workman employed in the construction work of Madanganj Harmara Road the difference between the minimum wage of Rs. 7 per day and the actual wage paid during the period that the workman provided labour on this construction work. I do not think it should be difficult for the State to carry out this direction since the workman employed on this construction work are all residents of the surrounding area and the muster roll maintained by the Public Works Department would give the particulars of such workmen. I would direct that the arrears of difference between the minimum wage of Rs. 7 per day and the actual wage disbursed shall be paid by the respondent to the workmen within two months from today and a report to that effect shall be submitted by the respondent to this Court on or before 30th April, 1983 setting out particulars of the payments made and the names of the workmen to whom such payments are made. I would also direct that the State shall hereafter pay to each workman employed in any famine relief work including the construction work of Madanganj Harmara Road, minimum wage for the labour provided in such construction work and no deduction in the minimum wage shall be made on the ground that the work turned out by such workman is less than the norm fixed by the Public Works Department, unless and until a notification is issued under the co relating the minimum wage with a particular quantity of work to be turned out by the workman. Since the petitioners have succeeded in the writ petition, the respondent will pay the costs of the writ petition to the petitioners. PATHAK J. I agree with the order proposed by my learned brother. But while he has found substance in the contention that the case is one of "forced labour" within the meaning of article 23 of the Constitution, I prefer to rest my decision on the ground that there is a breach of article 14 of the Constitution. It appears that in order to provide relief to persons affected by drought and scarcity conditions in the area, employment has been offered in the construction of the Madanganj Harmara Road 285 Payment of wages for the day is determined by the Public Works Department on the basis of a standard norm of work, the wage for completing the daily standard norm being fixed at Rs. 7. It may be noted that the minimum wage prescribed under the in respect of such work is also Rs. 7 per day. The Public Works Department has declared that if the quantum of work turned out during the day is less than the fixed standard norm the workers will be paid a mere proportionate amount of the wage of Rs. 7 per day, that is to say they will be entitled to a reduced wage only. Sanction for not adhering to the prescribed minimum wage of Rs. 7 per day and making payment of a lesser wage has been drawn from section 3 of the Rajasthan Famine Relief Works Employees (Exemption from Labour Laws) Act, 1964, which in provides, inter alia, that the will not apply to famine relief works or the employees thereof. The being thus out of the way, it is open to the Public Works Department to prescribe whatever wages norms it considers appropriate for payment to persons, employed by way of relief, who are affected by drought and scarcity conditions. It is apparent that in the matter of wages such persons have been treated as a class different from that to which workers from other areas belong. While the latter are entitled under the to the prescribed minimum wage, the former must be content with a lesser wage if the work turned out is less than the norm. To my mind, there is no justification for such discrimination. The circumstance that employment has been given to persons affected by drought and scarcity conditions provides only the reason for extending such employment. In other words, the granting of relief to persons in distress by giving them employment constitutes merely the motive for giving them work. It cannot affect their right to what is due to every worker in the course of such employment. The rights of all the workers will be the same, whether they are drawn from an area affected by drought and scarcity conditions or come from elsewhere. The mere circumstance that a worker belongs to an area effected by drought and scarcity conditions can in no way influence the scope and sum of those rights. In comparison with a worker belonging to some other more fortunate area and doing the same kind of work, is he less entitled than the other to the totality of those rights? Because he belongs to a distressed area, is he liable in the computation of his wages, to be distinguished from the other by the badge of his misfortune? The prescription of equality in Art, 286 14 of the Constitution gives one answer only, and that is a categorical negative. It is urged for the respondents that employment is provided to all able bodies inhabitants of the area as a measure of relief in their distress and it has been considered desirable to provide employment to all, even though at a wage below the prescribed minimum wage, than to provide employment to some only at the prescribed minimum wage. The argument evidently proceeds on the assumption that the wages are drawn from a fund too limited to provide for payment of a minimum wage to all. I see no justification for proceeding on that assumption. When the State employs workers for doing work needed on its development projects, it must find funds for such projects. And the fund must be sufficient to ensure the prescribed minimum wage to each worker, and this is particularly so having regard to the concept of a "minimum wage. " It seems to me that by prescribing the criterion which it has, the Public Works Department has effected an invidious discrimination bearing no reasonable nexus to the object behind the employment. In my judgment, the workers employed in the construction of the Madanganj Harmara Road as a measure of relief in a famine stricken area are entitled to a minimum wage of Rs. 7 per day, and that wage cannot be reduced by reference to the Rajasthan Famine Relief Works Employees (Exception from Labour Laws) Act, 1964 because in so far as the provisions of section 3 OF that Act countenance a lesser wage they operate against Art 14 of the Constitution and are, therefore, void. S.R. Petition allowed.

The respondent State in the public Works Department has engaged a large number of workers for the construction of Madanganj Harmara Road, close to Tilonia village with a view to providing relief to persons affected by drought and scarcity conditions. The workers employed in this construction work are divided into gangs of 20 persons or multiple thereof and for each gang one muster roll is maintained. The work done by each gang is measured every fortnight and payment is made by the Public Works Department to the Mate who is the leader of the gang according to the work turned out by such gang during each fortnight. The Public Works Department has fixed a certain norm of work to be turned out by each gang before the workmen belonging to such gang can claim the minimum wage of Rs. 7 per day with the result that if any particular gang turns out work according to the norm fixed by the Public Works Department, the Mate would be paid such amount as would be on distribution give a wage of Rs. 7 per day to the workmen constituting such gang, but if less work is turned out by such gang, payment to be made to the mate of such gang would be proportionately reduced and in that event, the wage earned by each member of such gang would fall short of the minimum wage of Rs. 7 per day. Further, this system of proportionate distribution of the wages adopted without any visible principle or norm enabled a workman who has put in less work to get more payment than the person who has really put in more work. Hence the public interest writ petition filed by the Director of the Social Work and Research Centre, complaining violation of the provisions of the , Articles 14 and 23 of the Constitution, and the vires of section 3 of the Rajasthan Famine Relief Works Employees (Exemption from Labour Laws) Act, 1964. Allowing the Petition, the Court ^ HELD: 1. Where a person provides labour or service to another for remuneration which is less than the minimum wage, the labour or service provided by him clearly falls within the meaning of the words 'forced labour ' and attracts the condemnation of Article 23. Every person who provides labour or service to another is entitled at the least to the minimum wage and if anything less than the minimum wage is paid to him, he can complain of violation of his 272 fundamental right under Article 23 and ask the court to direct payment of the minimum wage to him so that the breach of Article 23 may be abated. [280 D F] 2: 1. The constitutional validity of the Exemption Act in so far as it excludes the applicability of the providing that minimum wage may not be paid to a workman employed in any famine relief work, cannot be sustained in the face of Article 23. Article 23 mandates that no person shall be required or permitted to provide labour or service to another on payment of anything less than the minimum wage. Whenever any labour or service is taken by the State from any person, whether he be affected by drought and scarcity conditions or not, the State must pay, at the least, minimum wage to such person on pain of violation of Article 23. [280 F G, 282 B C] 2: 2. When the State undertakes famine relief work, it is no doubt true, that it does so in order to provide relief to persons affected by drought and scarcity conditions but, none the less it is work which enures for the benefit of the State representing the society and if labour or service is provided by the affected persons for carrying out such work, the State cannot pay anything less than the minimum wages to the affected persons. It is not as if dole or bounty is given by the State to the affected persons in order to provide relief to them against drought and scarcity conditions nor is the work to be carried out by the affected persons worthless or useless to the society so that under the guise of providing work what the State in effect and substance seeks to do is to give dole or bounty to the affected persons. The State cannot be permitted to take advantage of the helpless condition of the affected persons and extract labour or service from them on payment of less than the minimum wage. No work of utility and value can be allowed to be constructed on the blood and sweat of persons who are reduced to a state of helplessness on account of drought and scarcity conditions. [281 B E, H, 282 A] 2: 3. In the instant case, the Notification issued under the makes it clear that the minimum wage of Rs. 7 is fixed per day and not with reference to any particular quantity of work turned out by the workmen during the day. The Notification does not empower the employer to fix any particular norm of work to be carried out by the workman with reference to which the minimum wage shall be paid by the employer. The minimum wage is not fixed on piece rate basis, so that a particular minimum wage would be payable only if a certain amount of work is turned out by the workman and if he turns out less work, then the minimum wage payable would be proportionately reduced. Here the minimum wage is fixed at Rs. 7 per day and that is the minimum wage which must be paid by the employer to the workman so long as the workman works throughout the working hours of the day for which he can lawfully be required to work. The employer may fix any norm he thinks fit specifying the quantity of work which must be turned out by the workman during the day, but if the workman does not turn out work in conformity with such norm, the employer cannot pay him anything less than the minimum wage. If the norm fixed by the employer is reasonable and the workman does not turn out work according to such norm, disciplinary action may be taken against the workman and in a given case he must even be liable to be thrown out of employment, but he cannot be paid less than the minimum 273 wage, unless, of course, the minimum wage fixed by the Notification under the is correlated with the quantity of work to be turned out by the workman. Otherwise, it would be the easiest thing for the employer to fix an unreasonably high norm which a workman working diligently and efficiently during the day cannot possibly reach and thereby deprive the workman of the minimum wage payable to him. [283 B G] Peoples Union for Democratic Rights & Other vs Union of India &. Others [1983]1 S.C.R. 456 followed. PER PATHAK, J. 1. The workers employed in the construction of the Madanganj Harmara Road as a measure of relief is a famine stricken area are entitled to a minimum wage of Rs. 7 per day, and that wage cannot be reduced by reference to the Rajasthan Famine Relief Works Employees (Exemption and Labour Laws) Act 1964, because in so far as the provisions of section 3 of that Act countenance a lesser wage they operate against Article 14 of the Constitution and are, therefore, void.[286 D E] 2:1. By prescribing the criterion which it has, the Public Works Department has effected an invidious discrimination bearing no reasonable nexus to the object behind the employment. [286 C D] 2:2 The circumstance that employment has been given to persons affected by drought and scarcity conditions provides only the reason for extending such employment. In other words, the granting of relief to persons in distress by giving them employment constitutes merely the motive for giving them work. It cannot affect their right to what is due to every worker in the course of such employment. The rights of all the workers will be the same, whether they are drawn from area affected by drought and scarcity conditions or come from elsehwere. The mere circumstance that a worker belongs to an area affected by drought and scarcity conditions can in no way influence the scope and sum of those rights. In comparison with a worker belonging to some other more fortunate area and doing the same kind of work, he is not less entitled than the other to the totality of those rights nor liable to be distinguished from the other by the badge of his misfortune. [285 E G] 2: 3. When the State employs workers for doing work needed on its development projects, it must find funds for such projects. And the fund must be sufficient to ensure the prescribed minimum wage to each worker and this is particularly so having regard to the concept of a "minimum wage". Therefore, the argument that the wages are drawn from a fund too limited to provide for payment of a minimum wage to all is not justified. [286 B C]

Appeal No. 702 of 1966. Appeal by special Leave from the judgment and order dated July 30, 1964 of the Kerala High Court in Income tax Referred Case No. 20 of 1963. section T. Desai, section K. Aiyar and R. N. Sachthey, for the appellant. T. V. Viswanath Iyer, section K. Dholakia, and O. C. Mathur, for the respondent. The Judgment of the Court was delivered by Shah, J. Two persons Walter and Ramasubramony carried on business in cashewnuts as partners in the name and style of Messrs. Gemini Cashew Sales Corporation. The partnership was dissolved on the death of Ramasubramony on August 24, 1957, and the business was taken over and continued by Walter on his own account. The services of the employees were not interrupted and there was no alteration in the terms of employment of the employees of the establishment. In proceedings for assessment of tax it was urged on behalf of the firm that an amount of Rs. 1,41,506 taken into account under the head "Gratuity payable to workers of the business" in settling the accounts of the firm till August 24, 1957, was a permissible outgoing. The Income tax Officer rejected the claim and the Appellate Assistant Commissioner confirmed that order. The Income tax Appellate Tribunal held that by the transfer of the undertaking to Walter, there was no interruption in the employment of the workmen of the establishment, that the terms and conditions of service applicable to the workmen were not altered to their detriment, that Walter had not expressly agreed to take over the liability for compensation payable under section 25FF of the , and since there was dissolution of the partnership on August 24, 1957 and the undertaking was transferred, the workmen became entitled to retrenchment compensation, which the firm was liable to pay. The Tribunal accordingly held that the firm was entitled to deduct the sum of Rs. 1,41,506 in the computation of income in the assessment year. 1958 59. In recording their opinion on the following question submit ted by the Tribunal, 729 "Whether the allowance of Rs. 1,41,506 constitutes an allowable expenditure in the assessment of the firm for the year 1958 59", the High Court of Kerala observed that in the determination of the taxable profits of the firm till its dissolution, considerations about the liability to pay retrenchment compensation devolving upon Walter as the assignee of the business valuable consideration were irrelevant, and since it was maintaining accounts on mercantile system, the firm could claim as a Permissible outgoing the amount for which liability was incurred though no actual payment was made to the workmen. The Commissioner of Income tax appeals with special leave, against the order of the High Court recording an answer in the affirmative. The, subject matter of the claim was retrenchment compen sation payable to workmen of the establishment under section 25FF of the , Section 25F of the In dustrial Disputes Act, 1947, provides : "No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until (a) the workman has been given one month 's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice: Provided that no such notice shall be neces sary if the retrenchment is under an agreement which specifies a date for the termination of service; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days ' average pay for every completed year of service or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government. " Section 25FF, as substituted by Act 18 of 1957 with effect from November 28, 1956, provides : "Where the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, from the employer in relation to that undertaking to a new employer, every workman who 73 0 has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with the provisions of Section 25F, as if the workman had been retrenched : Provided that nothing in this section shall apply to a workman in any case where there has been a change of employers by reason of the transfer, if (a) the service of the workman has not been interrupted by such transfer; (b) the terms and conditions of service applicable to the workman after such transfer are not in any way less favourable to the workman than those applicable to him immediately before the transfer; and (c) the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer." Under section 25FF the right of the workmen to retrenchment com pensation arises on transfer of ownerships or management from the employer in relation to the undertaking to a new employer. But in the conditions set out in the proviso no such right accrues. It is common ground that the first and the second conditions in the proviso are satisfied. Counsel for the Commissioner contended that the third condition of the proviso was also satisfied, and no right to retrenchment compensation arose in favour of the workmen under section 25FF of the . Counsel for the Commissioner contended that the liability of the partners in a firm to pay retrenchment compensation being joint and several, when the undertaking carried on by a firm is continued by one of the partners after its dissolution, and the services of the workmen are not terminated and the terms and conditions of the service are not made less favourable, the partner continuing the business may appropriately be held liable to pay to the workmen retrenchment compensation on the footing that the service of the workmen had been continuous. Counsel relied upon the view expressed by the Calcutta High Court in Alex A. Apcar (Jr.) & Company vs M. N. Gan and Others(1) in which it was observed that a change of partnership by inclusion or retirement of partner, which legally changes the constitution of the firm, does not result (1) A.I.R. 1960 Cal. 14 731 in, a "change of business or employer within the meaning of sections 25F and 25FF". Counsel for the assessee relied upon a judgment of this Court in Anakapalia Co operative Agricultural and Industrial Society vs Its Workmen & Others(1) in support of the contention that on a bona fide transfer of an undertaking the workmen employed in the undertaking are entitled to retrenchment compensation under section 25FF against the transferor. That however was a case in which the transferee had declined to re employ the workmen of the transferor and the first condition of the proviso was not fulfilled. That case can have no application to the present case. In the view we take, that the allowance claimed is not a proper outgoing, or allowance in computing the profits of the assessee, we do not express any opinion on the question whether the workmen of the undertaking became entitled to retrenchment compensation on the transfer of the undertaking to Walter. Liability to pay retrenchment compensation arises under section 25FF when there is a transfer of the ownership or management of an undertaking : it arises on the transfer of the undertaking and not before. Transfer of ownership or management of an undertaking in law operates, except in the conditions Set out in the proviso, as retrenchment of the workmen. But until there is a transfer of the undertaking resulting in determination of employment the workmen do not become entitled to retrenchment compensation. So long as the ownership of the business continues with the employer, the right of the workmen to claim compensation remains contingent. A workman may, before the transfer of ownership of the business, himself terminate the employment: he may die or he may become superannuated: in none of these cases the owner of the business is under any obligation to pay retrenchment compensation to the workman. The obligation to pay compensation becomes definite only when there, is retrenchment by the employer, or when the ownership or management of the undertaking is, except in the cases contemplated by the proviso, transferred to a new employer, and not till then. The right therefore arises from determination of employment, or from transfer of the undertaking : it has no existence before these events take place. The judgment of this Court in Calcutta Company Ltd vs Com missioner of Income tax, West Bengal (2) on which reliance was placed by counsel for the assessee has no bearing on the present case, for in that case, expenditure which it was estimated had to be incurred to discharge an existing and definite obligation enforceable against the assessee in praesenti was held a permissible (1) [962] (2) 732 deduction in the computation of income. The Calcutta Com pany Ltd had sold plots of land for building purposes undertaking to develop them within six months by laying out roads, providing drainage and installing lights, etc. In the accounts of the Company maintained according to the mercantile system, the Company had credited the full sale price of the. plots agreed to be paid by the purchasers, but not actually received, and against the price it debited an estimated sum as expenditure for the development it had undertaken to carry out, even though no part of the amount was actually spent. By the terms of sale, the Company had undertaken an unconditional obligation which was enforceable against it : the liability was not contingent upon the happening of a future event. It was held by this Court that the outgoing debited was properly admissible. The decision of the House of Lords in Owen (H. M. Inspector of Taxes) vs Southern Railway of Peru Ltd.(1) on which counsel for the assessee relied also does not assist the the assessee. In that case under the Peruvian law the Southern Railway of Peru Ltd. was bound to pay its employees in Peru prescribed compensation payments upon termination of their services, subject to the fulfilment by the employee of certain conditions. The amount to be paid depended on the length of service and rate of pay at the end of the period of service. The Company set apart from the gross profits of each year sums prospectively payable under the Peruvian law as compensation on the termination of employment. In proceedings for assessment to tax of the Company made under Case 1 of Sch. D of the Income Tax Act, 1918 (8 & 9 Geo. 5, Ch. 40), it was contended on behalf of the Company that upon proper principles of commercial accountancy compensation calculated to have accrued due to each employee from year to year as deferred remuneration was properly allowable as a deduction. The Special Commissioners upheld the claim of the Company on the (,round that it was a matter of correct accountancy practice to make provision in the accounts for the sums in question. The matter reached the House of Lords in appeal from an order on a reference under section 64 of the Income Tax Act, 1952. The House held that where a number of similar contingent obligations arise from trading, there is no rule of law which prevents the deduction of a provision for them in ascertaining annual profits, if a sufficiently accurate estimate can be made. But a majority of the House held that the "provision claimed by the Company throughout the proceedings was not permissible by reason of the absence of discount and other factors". Lord MacDermott observed at p. 635 : ". .as a general proposition it is, I think, right to say that in computing his taxable profits for a (1) 733 particular year a trader who is under a definite obligation to pay his employees for their services in that year an immediate payment and also a future payment in some subsequent year, may properly deduct not only the immediate payment but the present value of the future payment provided such present value can be satisfactorily determined or fairly estimated. Apart from special circumstances, such a procedure, if practicable, is justified because it brings the true costs of trading in the particular year into account for that year and thus promotes the ascertainment of the "annual profits or gains arising or accruing fro in" the trade. " Lord MacDermott was of the view that the provision made by the Company led to anomalies, and was not admissible as made, and the case should be remitted to the Special Commissioners whether it is practicable to arrive at satisfactory deductions. Lord Radcliffe with whom the Lord Chancellor and Lord Tucker agreed was of the view that there is no rule of law which forbids the introduction of a provision for future payments in or payments out, if the right to receive them or the liability to make them, is in legal terms contingent at the closing of the relevant year. The question which arises in the present case is not about the admissibility of a provision made by a trader by the adoption of it reasonably satisfactory method estimating the present value of an obligation which may arise in future to pay a sum of money to his employees. The question that falls to be determined is whether the liability which arises on transfer of the, business is to be regarded as a permissible outgoing in the account of the business which is transferred. Broadly stated, the present value on commercial valuation of money to become due in future, under a definite obligation, will be a permissible outgoing or deduction in computing the taxable profits of a trader, even if in certain conditions the obligation may cease to exist because of forfeiture of the right. Where, however, the obligation of the trader is purely contingent, no question of estimating its present value may arise, for to be a permissible outgoing or allowance, there must in the year of account be a present obligation capable of commercial valuation. As already observed, the liability to pay retrenchment com pensation arose for the first time after the closure of the business and not before. It arose not in the carrying on of the business, but on account of the transfer of the business. During the entire period that the business was continuing, there was no liability to pay retrenchment compensation. The liability which arose on transfer of the business was not of a revenue nature. Profits of a business involve comparison between the state of the business at 734 two specific dates. Normally the liability which occurs after the last date, unless its source is in a pre existing definite obligation, cannot be regarded as a part of the outgoing of the. business debit able in the profit & loss account. A deduction which is proper and necessary for ascertaining the balance of profits and gains of the business is undoubtedly properly allowable, but where a liability to make a payment arises not in the course of the business, not for the purpose of carrying on the business, but springs from the transfer of the business, it is not, in our judgment, a properly debatable item in its profit & loss account as a revenue outgoing. The claim of the firm to treat it as an item in the determination of the profits of the firm under section 10(1) of the Income tax Act can.not, therefore,. be sustained. Under section 10(2) (xv) of the Indian Income tax Act in the computation of taxable profits (omitting parts of the clause not material) "any expenditure laid out or expended wholly and exclusively for the purpose of such business, profession or vocation", i.e. business, profession or vocation carried on by the assessee, is a permissible allowance. But to be a permissible allowance the expenditure must be for the purpose of carrying on the business. Where accounts are maintained on the the mercantile system, if liability to make the payment has arisen during the time the business is carried on, it May appropriately be regarded as expenditure. But where the liability is, during the whole of the period that the business is carried on, wholly contingent and does not raise any definite obligation during the time that the business is carried on, it cannot fall within the expression "expenditure laid not or expended wholly and exclusively" for the purpose of the business. Two cases illustrative of the principle may be noticed. It was held by the Madras High Court in Commissioner of Income tax, Madras vs Indian Metal and Metallurgical Corporation(1) that a provision made in the annual accounts maintained by an employer setting apart by way of a reserve to meet the liability, if any, to which the employer may become subject in the event of retrenching workmen because of the necessity of retrenchment of the services of the staff, was not a liability in praesenti in the year of account, but was only a contingent liability which may arise on the happening of a particular contingency and was not allowable as a ,deduction in assessment of tax. This Court in dealing with a case under the Wealth Tax Act in Standard Mills Company Ltd. V. ,Commissioner of Wealth tax, Bombay(1) held that a liability under the award of the Industrial Court to pay gratuity to its ,employees at certain rates on death while in service, or on voluntary retirement or resignation after fifteen years ' continuous (1) (2) 735 service, or on termination of service after certain specified periods, but not if the employee was dismissed for dishonesty or misconduct, was a mere contingent liability which arose only when the employment of the employee was determined by death, incapacity, retirement or resignation : the liability did not exist its praesenti. The amount of Rs. 1,41,506/ claimed as a permissible allow ance by the assessee in its profit & loss account cannot, in our judgment, be regarded as properly admissible either under section 10 (1) or section 10 (2) (xv) of the Income tax Act. The answer to the question must, therefore, be in the negative. The appeal is allowed and the order passed by the High Court is set aside. The Commissioner will be entitled to his costs in this Court. R.K.P.S. Appeal allowed.

A partnership of two partners was dissolved on the death of one of them on August 24, 1957 and the business was taken over by the surviving partner on his own account. The services of the employees were not interrupted and there was no alteration in their terms of employment. In proceedings for assessment to income tax for the assessment year 1958 59 it was urged on behalf of the firm that an amount of Rs. 1,41,506 taken into account under the head "gratuity payable to workers of the business" in settling the accounts of the firm till August 24, 1957 was a permissible outgoing. The Income tax Officer rejected the claim and the Appellate Assistant Commissioner confirmed his order. However, the Tribunal, in appeal, held that on the dissolution of the firm, the workmen became entitled to retrenchment compensation under section 25FF of the and the firm was therefore entitled to the deduction. The High Court, upon a reference, confirmed this view. On appeal to this Court, HELD : The amount claimed by the assessee as a permissible allowance in his profit and loss account could not be regarded as properly admissible either under section 10(1) or under section 10(2)(xv) of the Income Tax Act, 1922. [735 B] Under the proviso to section 25FF the liability.to pay retrenchment compensation arose for the first time after the closure of the business and not before. It arose not in the carrying on of the business, but on account of the transfer of the business. It was not therefore a liability of a revenue nature and could not be treated as a permissible deduction under section 10(1). [733 H] Alex A. Apcar (Jr.) & Company vs M. V. Gan and Others, A.I.R, , referred to. Anakpalia Cooperative Agricultural and Industrial Society vs Its, Workmen & Others, , Calcutta Company Ltd. vs Commissioner of Income tax, West Bengal, and Owen (H. M. Inspector of Taxes) vs Southern Railway of Peru Ltd., , distinguished. Where accounts are maintained on the mercantile system, if liability to make a payment has arisen during the time the business is carried on. and the expenditure is for the purpose of carrying on the business, it may be deductible under Section 10(2)(xv) but where the liability is during the whole of the period that the business is carried on wholly contingent and does not raise any definite obligation during that time it cannot fall L9Sup. CI/67 3 728 within the expression "expenditure laid out or expended wholly or exclusively" for the purpose of the business. [734 D E) Commissioner of Income tax, Madras vs Indian Metal and Metallurgical Corporation, and Standard Mills Company Ltd. vs Commissioner of Wealth tax, Bombay, , relied on.

Civil Appeals Nos. 615 617/73,618 20/73 and 1850 to 1852 of 1972. From the Judgment and Decree dated the 22nd June, 1962 of the Mysore High Court at Bangalore in Regular Appeal No. 157/56 Regular Appeal (B) No. 16/57 & RA (B) 6 of 1958. U.R. Lalit, S.S. Javali D.P. Singh & Ravi Parkash, for the Appellants in CA. 1850 52/72, R 5 in CA. 615/73, R 2 in CA. 616/73, R 6 in CA. 617/73 and R 3 in CA. Nos. 618 20/73. B.D. Bal, R.B. Datar & Miss Madhu Moolchandani, for the Appellant in C.A. Nos. 615 617/73, R 5 in CA. 1850 52/72 & for R 1 in CA. 618 620/73. S.T. Desai, K. N. Bhat & Nanjappa Ganesh for Appellant in CA. 618 620/73, RR 2 and 3 in CA. 1850 to 1851/72, RR. 2,3,17 & 18 in CA. 1852/72, RR 2,3 in CA. 616/73, RR 10 & 11 in CA. 616/73 & for RR 1, 2, 4,5 in CA. 617/73. S.B. Bhasame, K.A. Naik, & M.R.K. Pillai for R 1 in CA. 1850 52/72, CA 615 16/73, R 14 in CA. 617/73 and R 2 in CA. 618 620/73. K.R. Nagaraja & Alok Bhatacharya for R 12 in CA. 1850 52/72, CA. 615/73, R 9 in CA. 617/73, R 13 in CA. 617/73 and R 10 in CA, 618 620 of 1973. 345 P.R. Ramasesh, for RR 13, 15 (a) to (c) in CA. 1852/72, RR 15 & 17 in CA. 617/73 and RR 11, 14 (a) (c) and (d) in CA. 618/73. The Judgment of the Court was delivered by SEN, J. These nine consolidated appeals on certificate are directed from a common judgment and decree of the High Court of Mysore at Bangalore dated June 22, 1962 which affirmed, subject to a modification, the judgment and decree of the Civil Judge, Senior Division, Dharwar, dated July 5, 1956, substantially dismissing the plaintiff 's claim for declaration of title to, and possession of, certain watan properties and decreeing instead his alternative claim for partition and separate possession of his one sixth share therein. The principal question in controversy in these appeals is whether sections 3 and 4 of the Bombay Paragana and Kulkarni Watans Abolition Act, 1950 (for short 'Act No. 60 of 1950 ') and sections 4 and 7 of the Bombay Merged Territories Miscellaneous Alienations Abolition Act, 1955 (for short 'Act No. 22 of 1955 '), which provided for abolition of watans and alienations in the merged territories, resumption of watan land and its re grant, to the holder for the time being, which brought about a change in the tenure or the character of holding as watan land, affect the other legal incidents of the property under personal law. The suit out of which these appeals arise, was instituted by the appellant Nagesh Bisto Desai, as plaintiff, claiming against his two brothers Ganesh Bisto Desai and Gopal Bisto Desai defendants Nos.2 & 3, mother Smt. Akkavva alias Parvathibai, defendant No. 4, brother Bhimaji Martand Desai, defendant No.5 who had gone in adoption to Martand, member of a junior branch and father 's brother ' son Khando Tirmal Desai, defendant No. 1, a declaration that the properties described in Schedules B and C appended to the plaint, called the Kundgol Deshgat Estate, situate in the district of Dharwar in the State of Karnataka, formed an impartible estate and governed by the rule of lineal primogeniture and that the plaintiff being the present holder of the office of Desai was entitled to remain in full and exclusive possession and enjoyment of the suit properties and that the other members of the family had no right, title or interest therein but were only entitled to maintenace and residence, for exclusive possession of the family residential house at Kundgol known as Wada described in Schedule B part 2 from the defendants Nos. 2 to 5, for exclusive possession of insignia of honour described in Schedule E and one third share in the family movables described 346 in Schedule D. Alternatively, in the event of the Court holding that the properties described in Schedule B, C and D, were properties belonging to the joint Hindu family, the plaintiff claimed partition and separate possession of his one sixth share therein. It will be convenient, in the first place, to refer briefly to the history of the estate, to set out the pedigree showing the descent from a common ancestor and to show how the present case arose. The plaintiff 's suit is brought on the allegation that the Deshgat family of Kundgol Paragana of which the plaintiff and the defendants 1 to 4 are members is a very ancient and respectable one in the State of Jamkhandi which later merged in the then Province of Bombay and is now in the State of Karnataka. The lands and cash allowances described in Schedule B para (i) and (iii) are the emoluments of the district hereditary office of Desai. Abkari is the compensation given to the Desai family by the British Government when it took over the control of today and liquor in Hanchinal Inam Village from the Deshgat family. This amount, together with the cash allowance and the service lands appurtenant to the office of Desai and the houses and open sites form the impartible estate called the Kundgol Deshgat Estate, which was partly located within the territory of former feudatory State of Jhamkhandi and party in the territories of the then British India. The first inam was granted at the time of Thimappa in 1575. All the properties constituting the Deshgat were acquired under grants made by the Sultans and Rulers of Bijapur during the period from 1575 A.D. to 1694 A.D. with a couple of other grants received from the Chief of Jamkhandi during the period from 1120 A.D. to 1826 A.D. The watan has remained with the family which held the hereditary office of Desai for over four centuries. In 1904, service appurtenant to the office of Desai was commuted by the imposition of a "judi" or quit rent. Properties described in Schedules F and G have been in possession of the two junior branches descended from Gundopant and Lingappa from 1825 A.D. and 1854 A.D. respectively and are being enjoyed by them even now. The plaintiff 's father, Bistappa, the last holder of the office of Desai died on July 27, 1931 leaving behind him his widow Smt. Akkavva and four sons, Nagesh, Bhimrao, Ganesh and Gopal. Out of them, Bhimarao had gone in adoption to Martand. member of a junior branch. Upon his father 's death the plaintiff Nagesh Bisto Desai was recognised to be the watandar. The plaintiff 's cousin is Khandappa The subjoined genealogical table gives the relationship of the parties belonging to the senior branch descended from Thimappa. 347 GENEALOGICAL TABLE Thimppa | | | | Khanderao Pantoji Gundopant | | Thimappa Nilkant | | | | | | Ramappa Nagappa Mallappa | | | Bistappa | (adopted) | | | | Imnagappa Bistappa Mortand | (went in adoption) | | Bhimraw | (Adopted Deft.5) | | Bistappa(died 1931) Trimallappa =Smt. Akkevva (Deft 4) | | Khandappa | (Deft. 1) | | | | Nagesh Bhimrao Ganesh = Smt. Indirabai Gopal = (pantiff) (went adoption (Deft. 2) (Deft. 9) (Deft.3) to Martand) Smt. Kashibai (Deft. 10) 348 It appears that after the death of the plaintiff 's father in 1931, in the mutation proceedings that followed, the plaintiff first made a claim that the watan being impartible according to the custom of the family, he became the exclusive owner of the entire watan properties. Although his brothers Ganesh Bisto Desai and Gopal Bisto Desai, defendants 2 and 3 had at first consented to mutation of the watan in his name they later resiled from that position and the strongest opposition came from the plaintiff 's uncle Tirmal, father of Khando. In consequence of this, the plaintiff accepted before the revenue authorities that the properties belonged to the joint Hindu family and refrained from making any claim on the footing of the properties being impartible. In 1945, the plaintiff 's brother Bhimarao defendant No. 5 who had gone in adoption to Martand, started asserting a claim to 7 Mars of land and right of residence in the family Wada and this had the support of the plaintiff 's mother Smt. Akkavva. The defendant No. 5 Bhimarao in assertion of his claim brought Special Suit No. 51 of1949, in the Civil Court at Kundgol on the basis of the properties being impartible. In June 1946, the plaintiff leased out some home farm lands to defendants 6, 7 and 8, and this gave rise to proceedings under section 144 of the Code of Criminal Procedure, 1898. The Sub Divisional Magistrate Kundgol passed an order restraining defendants 2, 3 and 5 from disturbing the possession of defendants 6, 7 and 8 and this order was kept in force by the former State of Jamkhandi till merger in the former State of Bombay in August, 1948. The State Government revoked the order with effect from December 15, 1948, as a result of which the defendents 6, 7 and 8 brought suits for injunction. Due to discord in the family, the plaintiff left the ancestral residential house at Kundgol and started residing in his bungalow. The plaintiff has admittedly been regranted all the watan land under sub section (1) of section 4 of Act No. 60 of 1950 and section 7 of Act No. 22 of 1955 as if it were an unalienated land, being the holder of the watan to which it appertained, and he is deemed to be an occupant thereof within the meaning of the Bombay Land Revenue Code, 1879. The defendants filed separate written statements and repudiated the plaintiff 's claim of impartibility. They denied that the suit 349 properties formed an impartible estate and that succession to the estate was governed by the rule of lineal primogeniture. The defendant No. 1 asserted that there had been at least three partitions in the family. According to him, the allotment of the properties described in Schedules F and G to the two branches of Gundopant and Lingappa represented allotment of shares on partition. He pleaded that all the properties described in Schedules B C D and E were joint family properties and claimed one half share therein. The defendants Nos. 2 and 3, in their written statement, also asserted that the properties described in Schedules F and G to the two branches of Gundopant and Lingappa were shares allotted to them on partition. The defendant No. 4 supported the case pleaded by her sons defendants Nos. 2 and 3. The defendant No. 5, however, pleaded that there had never been a partition in the family and that the entire properties, that is to say, the properties described in the plaint Schedules B to G continued to be joint family properties wherein he claimed one fourth share. The remaining defendants also denied that the suit properties were impartible. The learned trial Judge rejected the plaintiff 's claim that he was entitled to remain in full and exclusive possession and enjoyment of the aforementioned properties being the watandar of the Kundgol Deshgat Estate and that other members had no right, title or interest therein except as to maintenance as junior members and held instead that properties belonged to the joint Hindu family and were, therefore, partible. He further held that the properties described in Schedules F and G in possession of the junior branches of Gundopant and Lingappa were not allotted to them as their share on partition and therefore had to be put into the hotchpotch. He accordingly passed a preliminary decree for partition, declaring the plaintiff 's share to be one twentyfourth of the entire estate and to other minor reliefs. On appeal, the High Court upheld the judgment of the trial Judge, holding that the suit properties were not impartible and were therefore liable to partition, but it set aside 350 the direction with regard to Schedules F and G properties on the finding that the two branches of Gundopant and Lingappa had separated from the joint family. It accordingly modified the decree of the learned trial Judge and held that the plaintiff was entitled to one sixth share in the properties described in Schedules B to E. Arguments in these appeals have been confined to the question as to whether, as a matter of law, even if it were assumed that the plaintiff had succeeded in proving that the Kundgol Deshgat Estate was an impartible estate, and that succession to it was governed by the rule of lineal primogeniture, the incident of impartibility of the watan as well as the rule of lineal primogeniture stand extinguished by Act No. 60 of 1950 and Act No. 22 of 1955, and it is no longer open to the plaintiff to make any claim on the basis of the alleged custom of impartibility or the rule of lineal primogeniture. The questions that fall for determination in these appeals are, firstly, whether the impartibility of the tenure of a paragana watan appertaining to the office of a Hereditary District (Paragana) officer in respect of which a commutation settlement has been effected, regulating succession to the property, by reason of family custom or a local custom being the incidents of such watan stands abolished by virtue of section 3 of Act No. 60 of 1950 or section 4 of Act No. 22 of 1955, and, secondly, whether the watan lands lost the character of being joint family property with the resumption of the watan under section 3 of Act No. 60 of 1950 or s.4 of Act No. 22 of 1955 and re grants thereof were exclusive to the plaintiff under section 4 of Act No.22 of 1955, by reason of his status as the watandar and therefore, they belonged to the plaintiff and were not capable of partition There is no merit in any of these submissions. It is argued that impartibility of the tenure was not an incident of the grant but the watan was impartible by custom and succession to it was governed by the rule of lineal primogeniture. Our attention is drawn to the averment contained in paragraph 3 of the plaint: "The Kundgol Deshgat Estate, along with the estates of two other District Hereditary offices of Nadgir and 351 Deshpande of Kundgol is impartible by custom and succession to it is governed by the rule of lineal primogeniture. This custom is ancient, invariable, definite and reasonable. It is both a family custom and also a local custom prevailing in the families of Paragana Watandar of Kundgol . . . . . " It is urged that in case of an impartible estate, the right to partition and the right of joint enjoyment are from the very nature of the property incapable of existence and therefore, the courts below were in error dismissing the plaintiff 's claim for a declaration that being the present holder of the office of Desai he was entitled to exclusive possession and enjoyment of the suit properties. It is further urged that even assuming that impartibility of the estate or the rule of primogeniture regulating succession were an incident of the watan the suit properties lost the character of being joint family property with the resumption of the watan and the re grants of the suit lands were exclusively to the plaintiff under sub section (1) of s 4 of Act No. 60 of 1950 and sub section (1) of section 7 of Act No. 22 of 1955, by reason of his status as the watandar and, therefore, they exclusively belonged to the plaintiff and they were not capable of being partitioned. There is no merit in the submission. The decision of these appeals must turn on the question whether the impartibility of the estate and the rule of lineal primogeniture by which succession to it was governed makes the suit properties the self acquired or exclusive properties of the plaintiff and, therefore, cannot be partitioned by metes and bounds between the members of the joint family. In Martand Rao vs Malhar Rao,(1) the Privy Council ruled as follows : "If an impartible estate existed as such from before the advent of British Rule, any settlement or regrant thereof by the British Government must, in the absence of evidence to the contrary, and unless inconsistent with the express terms of the new settlement, be presumed to continue the estate with its previous incidents of impartibility and succession by special custom. " It also held in that case : 352 "When there is a dispute with respect to an estate being impartible or otherwise the onus lies on the party who alleges the existence of a custom different from the ordinary law of inheritance, according to which custom the estate is to be held by a single member, and as such, not liable to partition. In order to establish that any estate is impartible, it must be proved that it is from its nature impartible and decendible to a single person, or that it is impartible and descendible by virtue of a special custom." "Any such special custom modifying the ordinary law of succession must be ancient and invariable and must be established to be so by clear and unambiguous evidence. " The courts below in their well considered judgments have considered minutely and elaborately the whole of the evidence, both oral and documentary, led by both the parties on the question of custom, and have come to a definitive finding that the evidence is of little or no assistance to establish the alleged custom pleaded by the plaintiff as to the impartibility of the estate or the rule of lineal primogeniture. They have held in favour of the defendants on this basic issue and substantially dismissed the plaintiff 's suit claiming full and exclusive title. That part of the judgment has rightly not been assailed before us, and the argument has proceeded on the footing that even if the Kundgol Deshgat Estate were an impartible estate, and that succession to it was governed by the rule of lineal primogeniture the incidents of impartibility of the watan as well as the rule of lineal primogeniture stand extinguished by Act No. 60 of 1950 and Act No. 22 of 1955. It has always been the accepted view that the grant of watan to the eldest member of a family did not make the watan properties the exclusive property of the person who is the watandar for the time being. In order to understand the arguments on this point, it is necessary to deal with the incidents of a Deshgat watan. In the Bombay Presidency, it has always been treated to be the joint family property. It may be worthwhile to refer to the decision of the Privy Council in Adrishappa vs Gurshindappa,(1) the headnote of which is that : 353 "Deshgat watan or property held as appertaining to the office of Desai is not to be assumed prima facie to be impartible. The burden of proving the impartibility lies upon the Desai, and on his failing to prove a special tenure or a family or district or local custom to that effect, the ordinary law of succession applies. " In a suit for partition of property forming part of a Deshgat estate brought by the younger brothers against their eldest brother who held the hereditary district office of Desai, partly within the State of Jamkhandi and partly within the territory of British India, the defence was that the watan was held by him as an impartible estate and that he was entitled being the watandar to be in full and exclusive possession thereof, subject to a right by custom, that a brother should receive maintenance out of the income derived from it. The Court of first instance having found that there was no invariable rule against the partition of a Deshgat watan, the High Court refused to allow effect to be given to what had not been proved to be "the established governing rule of the family, class or district" sufficient to establish the impartibility of the estate and held that the watan in question was subject to the general Hindu law, including the presumption as to the right to partition belonging to the members of the family to which it had descended. The Judicial Committee upheld the decision of the High Court holding that there was no general presumption in favour of the impartibility of an estate of this kind as to shift the burden of proof; the burden of proof was upon the Desai, who seeks to show that the property devolved upon him alone, in contravention of the ordinary rule of succession according to the Hindu law, and that no sufficient evidence had been given by the watandar either of family custom, or of district custom, to prevent the operation of the ordinary rule of law whereby the property would be partible. In Vinayak Waman Joshi Rayarikar vs Gopal Hari Joshi Rayarikar & Ors.,(1) the Court of first instance held that by custom a Deshgat Inam had become impartible and hence dismissed the suit for partition. On appeal, the High Court reversed upon the view that the mere fact that the management remained in the hands of the eldest branch was not sufficient to 354 establish the plea that the estate was impartible. While affirming the decision of the High Court, the Privy Council followed its earlier decision in Adrishappa 's case (supra), and agreed with the conclusion arrived at by the High Court that : "Neither by the terms of the original grant nor of the subsequent orders of the ruling power, nor by family custom, nor by adverse possession (if such there could be in a case like this, the eldest branch of the family acquired a right to perpetual management of the village or in consequence to resist its partition). " It is a trite proposition that property though impartible may be the ancestral property of the joint Hindu family. The impartibility of property does not per se destroy its nature as joint family property or render it the separate property of the last holder, so as to destroy the right of survivorship; hence the estate retains its character of joint family property and devolves by the general law upon that person who being in fact and in law joint in respect of the estate is also the senior member in the senior line. As observed by Sir Dinshaw Mulla in his celebrated judgment in Shiba Prasad Singh vs Rani Prayag Kumari Debi & Ors (1) "The keynote of the whole position, in their Lordships view, is to be found in the following passage in the judgment in the Tipperah case :(2) "Where a custom is proved to exist, it supersedes the general" law, which, however, still regulates all beyond the custom" "Impartibility is essentially a creature of custom. In the case of ordinary joint family property, the members of the family have (1) the right of partition, (2) the right to restrain alienations by the head of the family except for necessity, (3) the right of maintenance and (4) the right of survivorship. The first of these rights cannot exist in the case of an impartible estate, though ancestral, from the very nature of the estate. The second 355 is incompatible with the custom of impartibility as laid down in Sartaj Kuari 's(1) case and the first Pittapur case;(2) and so also the third as held in the second Pittapur case.(3) To this extent the general law of the Mitakshara has been superseded by custom, and the impartible estate though ancestral is clothed with the incidents of self acquired and separate property. But the right of survivorship is not inconsistent with the custom of impartibility. This right, therefore, still remains, and this is what was held in Baijnath 's case.(4) To this extent the estate still retains its character of joint family property, and its devolution is governed by the general Mitakshara law applicable to such property. Though the other rights which a coparcener acquires by birth in joint family property no longer exist, the birth right of the senior member to take by survivor ship still remains. Nor is this right a mere spes succession is similar to that of a reversioner succeeding on the death of a Hindu widow to her husband 's estate. It is a right which is capable of being renounced and surrendered. Such being their Lordships ' view, it follows that in order to establish that a family governed by the Mitakshara in which there is an ancestral impartible estate has ceased to be joint, it is necessary to prove an intention, express or implied, on the part of the junior members of the family to renounce their right of succession to the estate. " Since the decision of the Privy Council in Shiba Prasad Singh 's case (supra), it is well settled that an estate is impartible does not make it the separate and exclusive property of the holder : where the property is ancestral and the holder has succeeded to it, it will be part of the joint estate of the undivided family. The incidents of impartible estate laid down by the Privy Council in Shiba Prasad Singh 's case, supra, and the law as there stated, have been reaffirmed in the subsequent decisions of the Privy 356 Council and of this Court : Collector of Gorakhpur vs Ram Sundar Mal & Ors.!(1) Commissioner of Income Tax, Punjab. vs Krishna Kishore(2) Anant Bhikappa Patil vs Shankar Ramchandra Patil (3) Chinnathavi Alias Veeralakshmi vs Kulasekara Pandiya Naicker & Anr(4). Mirza Raja Shri Pushavathi Viziaram Gajapathi Raj Manne Sultan Bahadur & Ors. vs Shri Pushavathi Viseswar Gajapathi Raj & Ors.(5) Rajah Velugoti Kumara Krishna Yachendra Varu & Ors. vs Rajah Velugoti Sarvagna Kumara Krishna Yachendra Varu & Ors.(6) and Bhaiya Ramanuj Pratap Deo vs Lalu Maheshanuj Pratap Deo & Ors.(7) In Collector of Gorakhpur vs Ram Sundar Mal 's Case, supra, it was observed that though the decision of the Board in Sartaj Kuari 's case and the First Pittapur 's case appeared to be destructive of the doctrine that an impartible zamindari could be in any sense joint family property, this view apparently implied in these cases was definitely negatived by Lord Dunedin when delivering the judgment of the Board in Baijnath Prasad Singh 's case. In Commissioner of Income Tax, Punjab vs Krishna Kishore 's case dealing with an impartible estate governed by the Madras Impartible Estates Act, 1904, it was held that the right of junior members of the family for maintenance was governed by custom and was not based on any joint right or interest in the property as co owners. In Anant Bhikappa Patil 's case supra, it was observed that an impartible estate is not held in coparcenary though it may be joint family property. It may develove as joint family property or as separate property of the last male holder. In the former case, it goes by survivorship to that individual, among those male members who in fact and in law are undivided in respect of the estate, who is singled out by the special custom e.g. lineal male primogeniture. In the latter case, jointness and survivorship are not as such in point the estate devolves by inheritance by the last male holder in the order prescribed by the special custom or according to the ordinary law of inheritance as modified by the custom. 357 In Chinnathavi 's case. supra, it was observed that the dictum of the Privy Council in Shiba Prasad Singh case, supra, that to establish that an impartible estate has ceased to be joint family property for purposes of succession, it is necessary to prove an intention, express or implied, on the part of the junior members of the family to give up their chance of succeeding to the estate. The test to be applied is whether the facts show a clear intention to renounce or surrender any interest in the impartible estate or a relinquishment of the right of succession and an intention to impress upon the zamindari the character of separate property. In Mirza Raja Gajapathi 's case, supra, it was observed that an ancestral impartible estate to which the holder has succeeded by the custom of primogeniture is part of the joint estate of the undivided Hindu family. Though the other rights enjoyed by the members of a joint Hindu family are inconsistent in the case of an impartible estate, the right survivorship still remains. In Rajah Velugoti Kumara Krishna 's case, supra, it was observed that the only vestige of the incidents of joint family property, which still attaches to the joint family property is the right of survivorship which, of course, is not inconsistent with the custom of impartibility. In Bhaiya Ramanuj Pratap Deo 's case, supra, the principles laid down by the Privy Council in Shiba Prasad Singh 's case were reiterated. In the course of argument, great reliance was placed on the two decisions of this Court in Mirza Raja Ganapathi 's case, supra and Raja Velugoti Kumara Krishna 's case, supra, for the proposition that the junior members of a joint family in the case of an ancient impartible joint family estate take no right in the property by birth and therefore have no right of partition having regard to the very character of the estate that it is impartible. To our mind, the contention cannot be accepted. Both the decisions in Mirza Raja Ganapathi 's case, supra, and Raja Velugoti Kumara Krishna 's case, supra, turned on the provision of the Madras Estates (Abolition & Conversion into Ryotwari) Act, 1948 and the Madras Impartible Estates Act, 1904. There are express provisions made in sections 45 to 47 of the Abolition Act for the apportionment of compensation to the junior members of zamindari estates and sub.s (2) of section 45 thereof provides for payment of the capitalised value of the compensation amount to them on the basis of extinction of the estate. The scheme of the Abolition Act therefore contemplates the continued existence of the rights of the holder of an impartible estate vis a vis the junior 358 members of such an estate. The facts involved in those cases were also entirely different. In Mirza Raja Ganapathi 's case, supra it was a suit for partition for Vizianagram Estate, an ancient impartible estate governed by the Madras Impartible Estates Act 1904. The claim of the junior members regarding buildings which had been incorporated in the impartible estate as also their claim with regard to jewels treated as state regalia and therefore impressed with the family custom of impartibility was negatived. It was held that despite the fact that Vizinagram Estate had been notified to be an estate within the meaning of s.3 of the Madras Estate(Abolition and Conversion into Ryotwari) Act, 1948, the extinguishment of the proprietary right, title and interest of the zamindar did not affect his right or title to the impartible properties outside the purview of that Act and governed by the Madras Impartible Estates Act, 1904, but as regards other properties falling within the zamindari including lands were held to be partible. With regard to the buildings, it was held that the buildings in question were not partible by virtue of sub section (4) of section 18 of the Act as the buildings falling within the section vested in "the person who owned them immediately before the vesting". The expression "the person who owned" in sub section (4) of section 18 of the Act was held to refer to the land holder and not to any other person. Further, the buildings were outside the limits of the zamindari estate and therefore not covered by section 3 of the Abolition Act. The claim with regard to jewels failed because they were part of the impartible estate. In Raja Velugoti Kumara Krishna 's case, supra, it was a suit for partition by the junior members of Vankatgiri Estate, an ancient impartible estate governed by the Madras Impartible Estates Act, 1904. The suit was principally confined to the claim for a share to the Schedule B properties. The contention was that the impartibility was continued under that Act but ceased when the estate vested in the State Government under section 3 of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 and this had the effect of changing character of the properties in the B Schedule and making them partible. It was said that the junior members had a present right in the impartible estate and were entitled to share in the properties once it lost its character of impartibility. The Court had to consider the effect of the Abolition Act on the rights and obligations of the members of the family and held 359 that the Abolition Act has no application to properties which are outside the territorial limit of the Venkatgiri Estate. The claim that failed was in relation to properties which did not form part of a `zamindari estate ' within the meaning of section 1 (16) and therefore did not come within the purview of section 3 of the Abolition Act but continued to be governed by the Madras Impartible Estates Act, 1904. The contention that the plaintiff holding the District Hereditary Office of Desai and being the watandar of the Kundgol Deshgat Estate was entitled to remain in full and exclusive possession and enjoyment thereof to the exclusion of the other members of the joint Hindu family, runs counter to the scheme of the Bombay Hereditary Offices Act, 1874 (for short `the Watan Act '), and is against settled legal principles. The plaintiff 's rights to such watan properties whatever they were, subject to the rights of the other members of the family. The terms `Watandar ' is defined in section 4 of the Watan Act. It reads : Watandar means a person having a hereditary interest in the Watan. It includes a person holding watan property acquired by him before the introduction of British Government into the locality of the watan, or legally acquired subsequent to such introduction, and a person holding such property from him by inheritance. It includes a person adopted by an owner of a watan or part of a watan subject to the conditions specified in sections 33 to 35". If the words used in the definition are strictly and literally construed, it would mean that before a person can be said to be a watandar, he must have a hereditary interest both in the watan property and in the hereditary office, because it is these two that constitute the watan. There is no basis whatever for such a strict construction. The definition is undoubtedly in two parts : the first sets out what "watandar" means and the other states what is included in it and the question arises whether the primary definition i.e. the meaning portion of it should be regarded as primary and the inclusive part as illustrative or both the parts should be regarded as constituting one whole definition, the inclusive part being supplementary to the former. The controversy arising from the rival constructions 360 placed on the definition of "watandar" in section 4 of the Watan Act was set at rest by the Full Bench decision of the Bombay High Court in Vijayasingrao Bala Saheb Shinde Desai vs Janardanrao Narayanrao Shinde Desai.(1) Prior to that decision, two conflicting constructions on the definition had been placed by two Division Benches of the Bombay High Court. In Kadappa vs Krishtappa,(2) an alienation of watan land by a watandar to his bhaubandh for maintenance was challenged and Rangnekar and Divatia, JJ. held that the alienation was valid beyond the life time of the watandar inasmuch as it was to a watandar of the same watan, in other words, the alience who was a bhaubandh to whom a watan land had been transferred for maintenance regarded as a watandar though he had no interest in the hereditary office and the rights and privileges attached to it. It would, therefore, appear that in Kndappa 's case, supra; the entire definition of watandar in section 4 was looked upon as one, the latter part being supplementary and additional to what is contained in the first part. In Smt. Tarabai vs Murtacharya.(3) Sir John Beaumont C.J. and Wadia, J. however, struck a discordant note. It was that a person who merely acquired a watan property without acquiring the office and without being under any obligation to perform services attached to the office was not a watandar within the meaning of the aforesaid definition; in other words, it held that the first part of the definition was exclusive and exhaustive, the latter part being merely illustrative and the illustrations given in the latter part should fall within the ambit of the exclusive definition given in the first part, that is to say, the primary definition of a "watandar" in s.4 was that he was a person having a hereditary interest in a watan, i.e. the office and a property if any, and the subsequent words were merely explanatory of the primary definition and did not curtail it. In view of this conflict, the specific question referred to the Full Bench in Vijayasingrao 's case, supra, was "Whether the term `watandar ' as defined in section 4 of the Watan Act necessarily and always meant a person who had a hereditary interest not only in the watan property but also in the hereditary office". And, on a consideration of the scheme and the relevant sections of the Watan Act and the two earlier decisions, the Full Bench preferred the construction 361 placed on the term 'watandar ' in Kadappa 's case, supra, and concluded that a person who acquired watan property or held hereditary interest in it without acquiring the hereditary office and without being under an obligation to perform the services attached to each office was also a "watandar ' within the meaning of the Watan Act. There can be no doubt that the Watan Act was designed to preserve the pre existing rights of the members of joint Hindu family. The word 'family ' is defined in section 4 of the Watan Act to include 'each of the branches of the family descended from an original watandar ' and the expression 'head of a family ' is defined therein to include 'the chief representative of each branch of a family '. 'Representative watandar ' defined in section 4 meant 'a watandar registered by the Collector under section 25 as having a right to perform the duties of a hereditary office '. Section 5 of the Watan Act prohibited alienations of watan and watan rights. Clause (a) of sub section (1) of section 5. thereof, referred to a watander in general and provided that it would not be competent to such a watandar to mortgage, charge, alienate or lease, for a period beyond the term of his natural life, any watan, or any part thereof, or interest therein, to or for the benefit of any person who is not a watandar of the same watan, without the requisite sanction. The expression 'watandar of the same watan ' occurs in many sections of the Act. As already indicated the term 'watandar ' as defined in section 4 includes the members of a joint Hindu family. It must follow as a necessary corollary that the expression 'watandar of the same watan ' would include members of the family other than the watandar, who were entitled to remain in possession and enjoyment of the watan property. It is necessary to emphasize that commutation of service had not the effect of changing the nature of the tenure. The effect of the Gordon Settlement came up for consideration in The Collector of South Satara & Anr. vs Laxman Mahadev Deshpande & Ors.(1) when the Court referred to the decision in Appaji Bapuji vs Keshav Shamrav.(2) and quoted the following passage from the judgment of Sargent, C.J., with approval: "What is termed a Gordon Settlement was an Arrangement entered into in 1864 by a Committee, of which Mr. 362 Gordon, as Collector, was Chairman, acting on behalf of Government with the watandars in the Southern Maratha Country, by which the Government relieved certain watandars in perpetuity from liability to perform the services attached to their offices in consideration of a 'judi ' or quitrent charged upon the watan lands. . the reports of Mr. Gordon 's Committee on the Satara and Poona Districts and their correspondence with Government can, we think, leave no doubt that the settlements made by that committee, unless it was otherwise, specially provided by any particular settlement, were not intended by either party to these settlements, to convert the watan lands into the private property of the vatandars with the necessary incident of alienability, but to leave them attached to the hereditary offices, which although freed from the performance of service remained intact. " The Court continued: "But the Commutation settlement does not confer an indefeasible title to the grantee, for the right affirmed by the settlement under section 15(2) of the Watan Act is liable to be determined by lapse, confiscation or resumption (section 22 of the Watan Act). The State having created the watan, is entitled to put an end to the watan i.e. to cancel the watan and to resume the grant (1): Bachharam Datta Patil vs Vishwanath Pundalik Patil.(1) Therefore if there be mere commutation of service, the watan office ordinarily survives without liability to perform service, and on that account the character of watan property still remains attached to the grant. But the State Government may abolish the office and release the property from its character as watan property. " The Court then dealt with the scheme of the Act No. 60 of 1950 and observed that in the light of the incidents of the watan and the property granted for remuneration of the watandar, that the relevant provisions of the Act had to be considered in regard to the right of the watandar to regrant of the watan lands. It was observed that on a combined operation of sub section (3) of section 3 and section 4 of the Act, the holder of the watan land is entitled to regrant of the land in occupancy rights as an unalienated land. As to the effect of the 363 legislation, it was observed that section 3 in terms provides for abolition of the watan, extinction of the office and modification of the right in which the land is held. The abolition, extinction and modification arise by operation of section 3 of the Act, and not from the exercise of the executive power of confiscation or resumption by the State, and it was then said: "Undoubtedly the power of resumption of a watan may be exercised under section 22 of the Watan Act and such a resumption may destroy the right of the holder both to the office and the watan land, and in the absence of any provision in that behalf no right to compensation may arise. But where the abolition of the watan is not by executive action, but by legislative decree, its consequences must be sought in the statute which effectuates that abolition." As to the effect of the resumption of the watan lands under sub section (3) of section 3 and their regrant under sub section (1) of section 4 of the Act it was observed: "It must be remembered that the power which the State Government always possessed by the clearest implication of section 22 of the Bombay Hereditary Offices Act, 1874, of resumption is statutorily enforced by section 3 in respect of the Paragana and Kulkarni Watans. The State Government having the power to abolish a watan office, and to resume land granted as remuneration for performance of the duties attached to the office was not obliged to compensate the watandar for extinction of his rights. But the Legislature has, as a matter of grace, presumably because of settlement between the holders and the Government under the Gordon Settlement, provided by section 6 that cash compensation be awarded for loss of the right to cash allowance or remission of land revenue and has by section 4 conferred upon the holder of the watan land, for loss of his right, a right to regrant of the land as occupant and free from the obligation imposed by its original tenure as watan land. . But the operation of section 3 all Paraganas and Kulkarni watans falling within the Act are abolished, the right to hold office is extinguished, and the land granted as remuneration for performance of service is resumed. The holder of the land is thereafter liable to pay land revenue, and is 364 entitled, on payment of the occupancy price at the prescribed rate, to be regranted occupancy rights as if it is unalienated land. The right so conferred is, though not a right to cash compensation, a valuable right of occupancy in the land. By the resumption of watan land and regrant thereof in occupancy right, all the restrictions placed upon the holder of watan land are by the provisions of the Watan Act, and the terms of the grant, statutorily abolished. But the right of occupancy granted by section 4 adequately compensates the holder for loss of the precarious interest of a watandar, because the land regranted after abolition of the watan, is held subject only to the restrictions imposed by sub section (2) of section 4, and is freed from the incidents of watan tenure, such as restriction on alienation beyond the life time of the holder, devolution according to the special rule of succession, and the liability to consideration or resumption. " It must therefore be observed that the commutation of service under sub section (1) section 15 of the watan lands by which the watandars were relieved in perpetuity from liability to perform the services attached to their offices in consideration of 'judi ' or quit rent charged upon the watan land, unless where it was otherwise provided for, had not the effect of converting watan land into the private property of the watandars with the necessary incident of alienability but to leave them attached to the hereditary offices which, although freed from the performance of services, remained intact. Despite commutation of service, the office of watandars ordinarily survived without liability to perform service, and on that account the character of the watan lands still remained attached to the grant. By the end of the first half of the 19th century, the watandars had lost much of their raison d 'etre. The British thought it expedient to dispense with their services and the watandars were given an offer to convert their watans into private property by the annual payment of a Nazrana but they were opposed to this. At their own request, the Government agreed to continue their watans as unalienable after the service commutation settlements, subject to payment of 'judi ' or quit rent. After the service commutation settlements and the appointment of Mamlatdars, the watandars had practically no function to perform but the watans were not discontinued till the Government decided upon their abolition. 365 It is said that although co ownership of the joint family may exist in impartible property, a distinction must be drawn between present rights and future rights of the members of a family. This is because of the peculiar character of the property. Thus, while the junior members have future or contingent rights such as right of survivorship, they have, apart from custom or relationship, no present rights, as for instance, a right to restrain alienation or to claim maintenance. It is upon this basis that the submission is that the courts below manifestly erred in passing a decree for partition of the watan property described in Schedules B and C appended to the plaint. We are afraid, these submissions based upon the alleged impartibility of the watan properties or the applicability of the rule of lineal primogeniture regulating succession to the estate cannot prevail, as these being nothing more than incidents of the watan, stand abrogated by sub section (4) of section 3 Act No. 60 of 1950 and section 4 of Act No. 22 of 1955. It seems plain to us that the effect of Act No. 60 of 1950 and Act No. 22 of 1955 was to bring out a change in the tenure or character of holding as watan land but they did not affect the other legal incidents of the property under personal law. It will be convenient to deal first with the provisions of Act No. 60 of 1950. Section 3 of the Act lays down that, with effect from, and on, the appointed day, notwithstanding anything contained in any law, usage, settlement, grant, sanad or order, all watans shall be deemed to have been abolished and all rights to hold office and any liability to render service appertaining to the said watans shall stand extinguished. It further lays down that subject to the provisions of section 4, "all watan land is hereby resumed" and "shall be deemed to be subject to the payment of land revenue under the provisions of the Code and the rules made thereunder as if it were an unalienated land". The term 'Code ' as defined in section 2 (b) means "the Bombay Land Revenue Code, 1879". All incidents pertaining to the said watans stand extinguished from the appointed day. Sub section (1) of section 4 of the Act, insofar as material, provides: "4 (1). A watan land resumed under the provisions of this Act shall. . be regranted to the holder of the watan to which it appertained, on payment of the occupancy price. . and the holder shall be deemed to be an occupant within the meaning of the Code in respect of 366 such land and shall primarily be liable to pay land revenue to the State Government in accordance with the provisions of the Code and the rules made thereunder; all the provisions of the Code and rules relating to unalienated land shall, subject to the provisions of this Act, apply to the said land. " Clause (2) of Explanation to section 4 reads: "Explanation For the purposes of this section the expression "holder" shall include (i) all persons who on the appointed day are the watandars of the same watan to which the land appertained, and xx xx xx The provisions of Act No. 22 of 1955 are more or less similar. Likewise, section 4 of the Act provides that, notwithstanding anything contained in any usage, settlement grant etc., with effect from the appointed day, all alienations shall be deemed to have been abolished and all rights legally subsisting on the said date in respect of such alienations and all other incidents of such alienation shall be deemed to have been extinguished. Section 7 of the Act provides that "all land held under a watan is hereby resumed" and "shall be regranted to the holder in accordance with the provisions contained in sub sections (1) to (3) therein. Clause (1) of Explanation to section 7 reads: "Explanation For the purpose of this section, the expression "holder" shall include (1) an alienee holding land under a watan, and (2) xx xx xx xx Upon a plain reading of sub section (1) of section 4 of Act No. 60 of 1950 and of section 7 of Act No. 22 of 1955, it is clear that watan lands resumed under the provisions thereof, have to be regranted to the holder of the watan, and he shall be deemed to be an occupant within the meaning of the Code in respect of such land. 367 The expression 'holder ' as defined in cl. (i) Explanation to section 4 of the former Act includes "all persons who, on the appointed day, are the watandars of the same watan" and cl. (1) of Explanation to section 7 of the latter Act defines it to include 'an a lienee holding land under a watan". The term "an alienee" is defined in section 2 (1) (iii) to mean "the holder of an alienation and includes his co sharer". The Watan Act contemplated two classes of persons. One is a larger class of persons belonging to the watan families having a hereditary interest in the watan property as such and the other a smaller class of persons who were appointed as representative watandars and who were liable for the performance of duties connected with the office of such watandars. As already indicated, it would not be correct to limit the word "watandar" only to this narrow class of persons who could claim to have a hereditary interest both in the watan property and in the hereditary office. Watan property had always been treated as property belonging to the family and all persons belonging to the watan family who had a hereditary interest in such watan property were entitled to be called "watandars of the same watan" within the Watan Act. That being so, the members of a joint Hindu family must be regarded as holders of the watan land along with the watandar for the time being, and therefore the regrant of the lands to the watandar under sub section (1) of section 4 of Act No. 60 of 1950 and under section 3 of Act No. 22 of 1955 must enure to the benefit of the entire joint Hindu family. It appears that the same view has been taken in a Full Bench decision of the Bombay High Court in Laxmibai Sadashiv Date vs Ganesh Shankar Date(1). A controversy had arisen as to the purport and effect of the non obstante clause contained in section 4 of the Bombay Inferior Village Watans Abolition Act, 1959. Malvankar, J. in Dhondi Vithoba vs Mahadeo Dagdu(2) held that the effect of sub section (3) of section 4 read with section 5 of the Act was to bring about a change in the tenure or character of holding as Watan land, but it did not affect the other legal incidents of the property under personal law. The learned Judge therefore held that even though the watan was abolished and the incidents thereof were extinguished and the land resumed under 368 section 4, the Act maintained the continuity of the interest in the lands of persons before and after the coming into force of the Act provided, of course, the holder pays occupancy price in respect of the land. In other words, the property continues to be the joint family property or the property held by the tenants in common, as the case may be. In Kalgonda Babgonda vs Balgonda,(1) a Division Bench of the High Court took a view to the contrary and observed: "The words "all incidents appertaining to the said watans shall be and are hereby extinguished", must include every kind of incident, including the so called incident of a right to partition as claimed by the plaintiff in this case, even if such right existed. Further, the lands were resumed by the Government on that date in law and vested in the Government till the lands were re granted under section 5 or 6, or 9 of that Act. " xx xx xx xx "It is not possible for us to consider it reasonable to held that although the lands were resumed by the Government and the holder himself had lost all his rights till the lands were re granted to him except the right of asking, for re grant, the incidents of the property under personal law appertaining to impartible property would survive the extinguishment of the tenure and resumption of the land by the State. " It was obviously wrong in reaching the conclusion that it did. In Laxmibai Sadashiv Date 's case, supra, the Full Bench reversed the decision of the Division Bench and upheld the view taken by Malvankar, J. in Dhondi Vithoba 's case, supra, observed: "It is undoubtedly true that section 4 starts with a non obstante clause, but it is a well recognised canon of construction to give effect to non obstante clause having regard to the object with which it is enacted in a statute. The non obstante clause is contained at the inception of section 4 and the sole object of section 4 is to abolish alienation and rights and incidents in respect thereof. The right of a member of joint Hindu family to ask for partition of a joint family 369 property cannot be regarded as a right relating to grant of land as service inam or as an incident in respect thereof. xx xx xx xx The object of section 4 was not to affect in any manner rights created under the personal law relating to the parties and if the property belonged to joint Hindu family, then the normal rights of the members of the family to ask for partition were not in any way affected by reason of the non obstante clause contained in section 4." These observations, in our opinion, are clearly in consonance with the true meaning and effect of the non obstanate clause. It still remains to ascertain the impact of sub s (2) of section 4 of Act No. 60 of 1950 and sub section (3) of section 7 of Act No. 22 of 1955, and the question is whether the occupancy of the land regranted under sub section (1) of section 4 of the former Act and sub section (2) of section 7 of the latter Act is still impressed with the character of being impartible property. All that these provisions lay down is that the occupancy of the land regranted under sub section (1) of section 4 of the former Act shall not be transferable or partible by metes and bounds without the previous sanction of the Collector and except on payment of such amount as the State Government may, by general or special order, determine. It is quite plain upon the terms of these provisions that they impose restrictions in the matter of making alienations. On regrant of the land, the holder is deemed to be an occupant and therefore the holding changes its intrinsic character and becomes Ryotwari and is like any other property which is capable of being transferred or partitioned by metes and bounds subject, of course, to the sanction of the Collector and on payment of the requisite amount. It is the policy of the law to prevent the land working classes being driven into the state of landless proletariats so far as may be, and accordingly it is provided by these provisions that alienations of such holdings or partition thereof shall be ineffective unless the sanction of the Collector has first been obtained. It is of the utmost importance that this important safeguard should be maintained in full force and effect so that the parties must exactly know what they have bargained for. The condition for the grant of sanction by the Collector as a pre requisite for a valid transfer of a holding or the 370 making of a partition by metes and bounds, is to ensure that the actual tiller of the soil is not deprived of his land except for valid consideration, or that the partition effected between the members of a family is not unfair or unequal. These provisions therefore do not create a statutory bar to a transfer or a partition once the conditions mentioned therein are fulfilled. In the result, the appeals must fail and are dismissed. There shall however be no order as to costs. P.B.R. Appeals dismissed.

The plaintiff 's rather was the last holder of the office of Desai. After his death the plaintiff, who was his eldest son, was recognised as the watandar. In 1904 service appurtenant to the office of Desai was commuted by the imposition of 'judi ' or quit rent. Under section 4 (1) of the Bombay Pargana and Kulkarni Watans (Abolition) Act, 1950 and section 7 of the Bombay Merged Territories Miscellaneous Alienations Abolition Act, 1955 all the watan lands were re granted to the plaintiff and he was deemed to be the occupant thereof within the meaning of the Bombay Land Revenue Code. The plaintiff (appellant) filed a suit against respondents who were members of a joint Hindu family holding properties described as Kundgol Deshgat Estate claiming a declaration that the estate formed an impartible estate governed by the rule of lineal primogeniture. The plaintiff claimed that as the present holder of the office of Desai he was entitled to remain in full and exclusive possession and enjoyment of the suit properties and that other members of the family had no right, title or interest therein but were only entitled to maintenance and residence and in the alternative for partition and separation of 1/6 share therein. Denying all the plaintiff 's claims the respondents pleaded that the entire properties belonged to the joint Hindu family and were therefore liable to be partitioned. Rejecting all the claims of the appellant the Trial Court held that the properties belonged to the joint Hindu family and were therefore partible. On appeal the High Court, subject to a modification, upheld the decree of the court of first instance. The question at issue in the appeal to this Court was whether, (1) even assuming that the estate was impartible and governed by the rule of lineal primogeniture by custom as pleaded, the incidents of impartibility as well as the rule of 342 lineal primogeniture being nothing more than an incident of the watan, stood abrogated by section 3(4) of the 1950 Act and section 4 of the 1955 Act and as such it was not open to the plaintiff to make any claim on the basis of the alleged custom, (2) with the resumption of the watan and the re grant of the watan lands to him, the suit properties lost their character as being joint family property and had become, under the provisions of the 1950 and 1955 Acts, the plaintiff 's exclusive property by reason of his status as watandar and as such were not capable of being partitioned. Dismissing the appeal, ^ HELD: It is well settled that property though impartible may be the ancestral property of the Joint Hindu Family. The impartibility of the estate does not per se destroy its nature as joint family property or render it the separate property of the last holder, so as to destroy the right of survivorship; hence, the estate retains its character of joint family property and its devolution is governed by the rule of survivorship. To establish that a family governed by the Mitakshara in which there is an ancestral impartible estate has ceased to be joint, it is necessary to prove an intention, express or implied, on the part of the junior members of the family to renounce their succession to the estate. [354 C D] Martand Rao vs Malhar Rao, [1928] 55 IA 45: AIR 1928 PC 10: Adrishappa vs Gurushidappa, (1880) 7 IA 162: ILR 7 Cal. LR 1 (PC); Vinayak Waman Joshi Rayarikar vs Gopal Hari Joshi Rayarikar, [1903] 30 IA 77: ILR 7 Cal. WN 409; Shiba Prasad Singh vs Rani Prayag Kumari Debi, (1932) 59 IA 331: AIR 1932 PC 216: ; Collector of Gorakhpur vs Ram Sunder Mal, (1934) 61 IA 286: AIR 1934 PC 157: CIT vs Dewan Bahadur Dewan Krishna Kishore, (1941) 68 IA 155: ; Anant Bhikappa Patil vs Shankar Ramchandra Patil, (1943) 70 IA 232: AIR 1943 PC 196 and Chinnathayi vs Kulasekara Pandiya Naicker, ; ; , relied on. Mirza Raja Shri Pushavathi Viziaram Gajapathi Raj Manne Sultan Bahadur vs Shri Pushavathi Visweswar Gajapathi Raj, ; and Rajah Velugoti Kumara Krishna Yachendra Varu vs Rajah Velugoti Sarvagna Kumara Krishna Yachendra Varu, ; (1969) 3 SCC 281: ; , distinguished. Neelkisto Deb Burmono vs Beerchunder Thakoor, (1867 69) 12 MIA 523; Rani Sartaj Kuari vs Rani Deoraj Kuari (1888) 15 IA 51: ILR (1888) 10 All 272 (PC); Rama Krishna Rao Bahadur vs Court of Wards, (1899) 26 IA 83: ILR ; Raja Ram Rao vs Raja of Pittapur, (1918) 45 IA 148: AIR 1918 PC 81; Baijnath Prasad Singh vs Tej Bali Singh, (1921) 48 IA 195: AIR 1921 PC 62 and Bhaiya Ramanuj Pratap Deo vs Lalu Maheshanuj Pratap Deo , referred to. 2. The plaintiff 's contention runs counter to the scheme of the Bombay Hereditary offices Act, 1874, and is against settled legal principles. The plain 343 tiff 's rights to such watan properties, whatever they were, were subject to the rights of the other members of the family. [359 C D] In the former Bombay Presidency, a Desghat watan had always been treated to be the joint family property and the grant of watan to the eldest member of a family did not make the watan property the exclusive property of the person who was the watandar for the time being. The definition of the term "watandar" as contained in section 4 of the Bombay Hereditary offices Act is in two parts: the first sets out what "watandar" means and the other states what is included in it, that is, the entire definition of watandar must be looked upon as one, the latter part being supplementary and additional to what is contained in first part. Thus, a person who acquired watan property or held hereditary interest in it without acquiring the hereditary office and without being under an obligation to perform the services attached to such office was also a "watandar" within the meaning of the Watan Act. There can be no doubt that the Watan Act was designed to preserve to pre existing rights of the members of a joint Hindu family. The expression "watandar of the same watan" would include members of the family other than the watandar, who were entitled to remain in possession and enjoyment of the watan property. [359 G H 361 F] Vijyasingrao Balasaheb Shinde Desai vs Janardanrao Narayanrao Shinde Desai, ; Kadappo Bapurao Desai vs Krishtappa Bachappa Desai, 37 Bom. LR 599: AIR 1935 Bom. 380 and Laxmibai Sadashiv Date vs Ganesh Shankar Date, AIR 1977 Bom. 350, approved. Tarabai Sriniwas Naik Guttal vs Murtacharya Anantacharya, , overruled. The commutation of service under section 15(3) of the Watan Act by which the watandars were relieved in perpetuity from liability to perform the services attached to their offices in consideration of 'judi ' or quit rent charged upon the watan land unless where it was otherwise provided for, had not the effect of converting watan land into the private property of the watandars with the necessary incident of the alienability, but to leave them attached to the hereditary offices, which although free from the performance of services, remain in tact. Despite commutation of service, the office of watandars ordinarily survived without liability to perform service, and on that account the character of the watan lands still remained attached to the grant. [364 D F] Collector of South Satara vs Laxman Mahadev Deshpande, ; , relied on. Appaji Bapuji vs Keshav Shamrav, ILR , referred to. Bachharam Datta Patil vs Vishwanath Pundalik Patil, ; 1956 SCJ 721, referred to. 344 5. The impartibility of the watan lands of the applicability or the rule of lineal primogeniture regarding succession to the estate, by the alleged custom as pleaded, being nothing more than an incident of the watan, stood extinguished by s.3(4) of the 1950 Act and s.4 of the 1955 Act. The effect of these Acts was to bring out a change in the tenure or character of holding as watan lands but they did not affect the other legal incidents of the property under the personal law. That being so, the members of a joint Hindu family must be regarded as holders of the watan land along with the watandar for the time being and therefore regrant of the lands to the watandar under section 4(1) of the 1950 Act and under section 3 of the 1955 Act must enure to the benefit of the entire joint Hindu family. [365 C, E; 367 E] 6. Section 4(2) of the 1950 Act and section 7(3) of the 1955 Act do not create a statutory bar to a transfer or a partition once the conditions mentioned therein are fulfilled. [370 B] Laxmibai Sadashiv Date vs Ganesh Shankar Date, and Dhondi Vithoba Koli vs Mahadeo Dagdu Koli, AIR 1973 Bom. 323, approved. Kalgonda Babgonda Patil vs Balgonda Kalgonda Patil, , overruled.

DICTION: Writ Petition No. 199 of 1986 Under Article 32 of the Constitution of India. with Civil Appeal No. 664 of 1986 From the Judgment and Order dated 20th January, 1986 of the Bombay High Court in Writ Petition No. 183 of 1986. V.M. Tarkunde and Rajiv Datta, for the Petitioner in W.P. No. 199 of 1986. B. Datta, Additional Solicitor General, Soli J. Sorabji and K.K. Venugopal, A.G. Ganguli, A. Subba Rao, Miss Kutty Kumarmangalam, C.V. Subba Rao, Harish Salve, K.R. Nagaraja, B.R. Agarwala, M.M. Jayakar and Miss V. Menon, for the Respondents in W.P. No. 199 of 1986 F.S. Nariman and A.B. Diwan, P.H. Parekh and Uday Lalit, for the Appellants in C.A. No. 664 of 1986 B. Datta, Additional Solicitor General, K.K. Venlugopal, A.G. Ganguli, A. Subba Rao, Miss Kutty Kumarmangalam, C.V. Subba Rao, B.R. Agarwala, M.M. Jayakar and Miss V. Menon, for the Respondents in C.A. No. 664 of 1906. The Judgment of the Court was delivered by PATHAK, J. The petitioners, M/s Indo Afghan Chambers of Commerce and its President, Sundar Lal Bhatia, are aggrieved by the grant of additional licences to the respondents, M/s Rajnikant Brothers and M/s Everest Gems for the import of dry fruits. The petitioner, M/s Indo Afghan Chambers of Commerce, is an association of dealers engaged in the business of selling dry fruit in North India. The dry fruit is purchased by them either locally or through imports from outside India. The respondents, M/s Rajnikant Brothers and M/s Everest Gems, are diamond exporters who have been issued additional licences pursuant to an order of the Court in the following circumstances. 92 The respondents diamond exporters had applied for the grant of Export House Certificates under the Import Policy 1978 79 and had been denied the Certificates on the erroneous ground that they had not diversified their exports. In writ petitions filed in the Bombay High Court, they were held entitled to the Export House Certificates. Special leave petitions filed by the Union of India against the order of the High Court were dismissed by this Court by its order dated April 18, 1985 which, while confirming the order of the High Court directed the appellants to issue the necessary Export House Certificates for the year 1978 79, and further that: "Save and except items which are specificially banned under the prevalent Import Policy at the time of import, the respondents shall be entitled to import all other items whether canalised or otherwise in accordance with the relevant rules. " The respondents diamond exporters and other like diamond exporters were granted Additional Licences, and started importing goods on those Additional Licences. It is the case of the petitioners that the goods sought to be imported on the Additional Licences included those which were prohibited by the prevalent Import Policy. The diamond exporters commenced the Import of acrylic ester monomers. This was challenged by M/s Raj Prakash Chemicals Ltd., an Indian company manufacturing acrylic ester monomers in India, by a writ petition in the Bombay High Court seeking a clarification of the order dated April 18, 1985 of this Court mentioned earlier. The High Court rejected the writ petition, and an appeal by Special Leave filed by the Indian company was disposed of by this Court by its order dated March 5, 1986. The Court held that it was not permissible for the diamond exporters to import acrylic ester monomers under the Additional Licences granted to them during the period of the Import Policy 1985 88, but having regard to the circumstance that the High Courts had already passed orders permitting such import and further that the Import Control Authorities had specifically allowed such import this Court permitted such imports to be completed in respect of which irrevocable Letters of Credit had been opened and established before October 18, 1985, the date on which for the first time an order was made by the Court imposing a restriction on the clearing of acrylic ester monomers by the Customs authorities. The Court regarded the date, October 18, 1985 as a critical date because the diamond exporters could be said to have been warned on and from that date that the Court could possibly take a different view from that prevailing during the period before that date when, because of the orders of the High Courts and the conduct of the Import Control Authorities, the diamond exporters could have legitimately believed that they were 93 entitled to effect such imports. It was made clear by the Court that cases in which irrevocable Letters of Credit had been opened and established after October 18, 1985 would not be entitled to the benefit of that order. The petitioners contend that the principle which was applied to the import of acrylic ester monomers extends likewise to the import of all other commodities under Additional Licences granted to diamond exporters in similar circumstances. It is asserted that the respondents diamond exporters and other like diamond exporters began to import dry fruit under their Additional Licences. It is contended that having regard to the terms of the order of this Court dated April 18, 1985 as construed and clarified by its order dated March 5, 1986 the diamond exporters are not entitled to import dry fruit. By order dated March 5, 1986 the Court construed its order dated April 18, 1985 to mean that only such items could be imported by diamond exporters under the Additional Licences granted to them as could have been imported under the Import Policy 1978 79, the period during which the diamond exporters had applied for Export House Certificates and had been wrongfully refused, and were also importable under the Import Policy prevailing at the time of import, which in the present case is the Import Policy 1985 88. These were the items which had not been "specifically banned" under the prevalent Import Policy. The items had to pass through two tests. They should have been importable under the Import Policy 1978 79. They should also have been importable under the Import Policy 1985 88 in terms of the order dated April 18, 1985. The case of the petitioners is that under the Import Policy 1978 79 dry fruits (excluding cashewnuts) could be imported by all persons under the Open General Licence. Dry fruits (excluding cashewnuts), is mentioned at item 22 of Appendix 10 of the Import Policy 1978 79 as open to import under the Open General Licence. There was no need to obtain an Additional Licence for importing them in the year 1978 79, and therefore, the wrongful denial of Additional Licences to diamond exporters in the year 1978 79, could not justify any restitution subsequently in regard to the import of dry fruits (other than cashewnuts). There is substance in the contention. Under the Import Policy 1978 79 dry fruits (excluding cashewnuts) could be imported by all persons for whatever purpose under the Open General Licence. No Additional Licence was required. If an Additional Licence was wrongfully denied to diamond exporters at time when dry fruits (excluding cashewnuts) were importable under the Open General Licence no 94 damage can be said to have been suffered by diamond exporters who had been refused Export House Certificates, and consequently Additional Licences, under the Import Policy 1978 79. In the circumstances, no question of restitution could be said to arise for the wrongful denial of the Additional Licences. The wrongful denial of the Additional Licences was wholly immaterial to the importing of dry fruits (excluding cashewnuts). It is urged by the respondents diamond exporters that paragraph 176 of the Import Policy 1978 79 envisages the grant of Additional Licences for the import of raw materials which have been placed on Open General Licence for Actual Users (Industrial). It has not been shown to us that dry fruits were placed on Open General Licence specificially for Actual Users (Industrial). Under the Import Policy 1978 79 their import was open to all persons. We may assume for the purpose of this case that a diamond exporter is legitimately entitled to obtain an Additional Licence under the Import Policy 1978 79 for an item which is different from the item he may have intended to import had the Additional Licences been rightly granted to him originally. In that event, the diamond exporter can succeed only if the item could have been imported under the Import Policy 1978 79 and also under the Import Policy 1985 88 in accordance with the terms of the order of this Court dated April 18, 1985 as construed by this Court by its judgment dated March 5, 1986. The position in regard to the import of dry fruits (excluding cashewnuts) is simple and suffers from no complexity. As has been mentioned, dry fruits (excluding cashewnuts) could be imported by all persons under the Open General Licence under the Import Policy 1978 79. But under the Import Policy 1985 88, when the dry fruits (excluding cashewnuts and dates) are now sought to be imported, dry fruits (excluding cashewnuts and dates) are no longer open to import under the Open General Licence. The sanction for importing them must be found under some other provision of the Import Policy. If dry fruits (excluding cashewnuts and dates) are regarded as items for stock and sale, the import is governed by paragraph 181(3) in Chapter XIII of the Import Policy 1985 88. Paragraph 181(3) declares that import of dry fruits (excluding cashwenuts and dates) will be allowed against licences issued to dealers engaged in this trade, the value of the import licence in each case being equal to 20 per cent of the C.I.F. value of the best year 's imports of the applicant in respect of dry fruits (excluding 95 cashewnuts and dates) during any of financial years from 1972 73 to the preceding Licencing year, subject to a minimum of Rs.5000. Admittedly the diamond exportes cannot be regarded as dealers engaged in the trade of stocking and selling dry fruits (excluding cashewnuts and dates). They are, therefore, not entitled to the advantages of paragraph 181(3) of the Import Policy 1985 88. But the case of the respondents diamond exporters, is that they import the dry fruits as raw material for the purpose of selling to eligible Industrial Actual Users for processing or manufacturing into a variety of products, such as almond oil, Ayurvedic drugs and medicines, Unani drugs and medicines, processed and package foods, sweets and confectionary, and we are referred to item 1 in Appendix 6 of the Import Policy 1985 88. Now item 1 of Appendix 6 speaks of: "1. Raw materials, components and consumables (non iron and steel items) other than those included in the Appendices 2, 3 Part A, 5 and 8. " The petitioners point out that the item is covered in Appendix 2 Part B of the Import Policy 1985 88 and, therefore, the respondents diamond exporters are not entitled to resort to item 1 of Appendix 6. Appendix 2 Part B (List of Restricted Items) contains item 121 which reads: "(121) All consumer goods, howsoever described, of industrial, agriculatural or animal origin, not appearing individually in Appendices 3 Part A and 5 or specifically listed for import under Open General Licence. " There can be no dispute that dry fruits must be regarded as consumer goods of agricultural origin. The words "agricultural origin" are used in the broadest sense. It is also clear that dry fruits do not appear in Appendix 3 Part A and 5 nor can be imported under the Open General Licence under the Import Policy 1985 88. Inasmuch as they fall within item (121) of Appendix 2 Part B they are excluded from the scope of item 1 of Appendix 6, and cannot be imported as raw materials and consumables for sale to Actual Users (Industrial). It is urged by the respondents diamond exporters that item 121 is not attracted because it refers to "consumer goods", and consumer goods are not raw material for the purposes of item 1 of Appendix 6. There is a fallacy here. It will be noticed that "consumables" are referred to in item 1 of 96 Appendix 6 of goods meant for Actual Users (Industrial). We are not satisfied that "consumer goods" in item 121 of Appendix 2 Part B cannot refer to dry fruits imported for supply to Actual Users (Industrial). In construing the order dated April 18, 1985 of this Court, the judgment dated March 5, 1986 of this Court explained the singificance of the words "specifically banned" occurring in the former order. The expression determines the range of the items open to import by diamond exporters holding Additional Licences. It was declared that the items exluded from import by diamond exporters under Additional Licences under the Import Policy 1985 88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy. Appendix 2 Part A is the successor of Appendix 4 (List of Absolutely Banned Items) of Import Policy 1978 79. A question arose before us whether Appendix 2 Part B of Import Policy 1985 88 could also be regarded as a successor of Appendix 4. It appears from the material placed before us that Appendix 2 Part B (List of Restricted Items) was also successor of Appendix 4 (List of Absolutely Banned Items). Appendix 4 in the Import Policy 1978 79 was described as the Absolutely Banned List. In the Import Policy 1982 83, the same Appendix 4 is described as List of Non Permissible Items (Banned). The same description of Appendix 4 continued in the Import Policy 1983 84. During that year Beef Tallow was added in Appendix 4. In the Import Policy 1984 85, Appendix 4 became Appendix 2 Part A and Appendix 2 Part B. Appendix 2 Part A was described as a List of Banned Items and Appendix 2 List B was described as List of Restricted Items. In the Contents of the Import Policy 1985 88 the list of Appendices makes clear that Appendix 4 of Import Policy 1983 84 became Appendix 2 Part A and Appendix 2 Part B of the Import Policy 1984 85. The same description of Appendix 2 Part A and Appendix 2 Part B was continued in the Import Policy 1985 88. Therefore, it is apparent that the present Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 (List of Absolutely Banned Items) under the Import Policy 1978 79. On the reasoning which found favour with the Court in its judgment dated March 5, 1986 we hold that diamond exporters holding Additional Licences were not entitled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985 88. On that ground also the respondents diamond exporters are not entitled to take advantage of item 121 of Appendix 2 Part B for the purpose of importing dry fruits. As held by this Court in its judgment dated March 5, 1986, holders of Additional 97 Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985 88. Dry fruits are not included in that List and therefore they cannot be imported under Additional Licences. In our opinion the respondents diamond exporters are not entitled to import dry fruits under the Import Policy 1985 88 under the Additional Licences possessed by them. They are also not entitled to the benefit extended by the judgment of this Court dated March 5, 1986 to those diamond exportes who had imported items under irrevocable Letters of Credit opened and established before October 18, 1985. It appears from the record before us that the respondents diamond exporters opened and established the irrevocable Letters of Credit after that date. One more contention of the respondents diamond exporters remains to be noticed. It is urged that the writ petition under Article 32 is not maintainable because the petitioners ' fundamental rights are not violated. It is pointed out that no appeal has been filed by the Customs authorities or by the Import Control authorities against the interim order dated January 8, 1986 of the Bombay High Court directing the Customs authorties to permit M/s Everest Gems to clear the imported consignment of almonds. We do not think that an interim order can defeat the fundamental rights of the petitioners merely because it has not been questioned by the Customs authorities or the Import Control authorities. The writ petition is allowed and the respondents Nos. 10 and 11, M/s Rajni Kant Brothers and M/s Everest Gems are restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79. In the circumstances there is no order as to costs. Civil Appeal No. 664 of 1986 is directed against the judgment and order of the Bombay High Court rejecting the appellants ' writ petition challenging the import of dry fruits by the respondent, M/s Everest Gems under Additional Licences granted under the Import Policy 1978 79. The questions raised in this appeal are identical with those raised in the writ petition disposed of earlier. In the result this appeal is allowed, the judgment and order dated January 28, 1986 of the Bombay High Court are set aside and the writ 98 petition filed in the High Court is allowed. The respondent, M/s Everest Gems is restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79. There is, however, no order as to costs. A.P.J. Appeal allowed.

The petitioner, an associations of dealers engaged in the business of selling dry fruit in North India, who purchase dry fruits either locally or through imports from outside India, challenged the grant of additional licences to the respondents diamond exporters, under Article 32 of the Constitution. On behalf of the petitioners, it was contended: (i) that the goods sought to be imported on the Additional Licences included those which were prohibited by the prevalent Import Policy; (ii) that the principle which was applied to the import of acrylic easter monomers extends likewise to the import of all other commodities under Additional Licences granted to diamond exporters in similar circumstances and, therefore, the diamond exporters are not entitled to import dry fruit; and (iii) that the import of dry fruit is covered by item 121 in Appendix 2 Part B (List of Restricted Items) of the Import Policy 1985 88 and, therefore, the respondents are not entitled to resort to Item 1 of Appendix 6. On behalf of the respondents, it was contended: (i) that paragraph 176 of the Import Policy 1978 79 envisages the grant of Additional Licences for the import of raw materials which have been placed on Open General Licence for Actual Users (Industrial); (ii) that they import the dry fruits as raw material for the purpose of selling to eligible Industrial Actual Users for processing for manufacturing into a variety of products under Item 1 of Appendix 6 of the Import Policy 1985 86; (iii) that item 121 of Appendix 2 Part B (List of Restricted Items) is not attracted because it refers to "consumer goods", and consumer goods 89 are not raw material for the purposes of item 1 of Appendix 6; and (iv) that the petition under Article 32 is not maintainable because the petitioners ' fundamental rights are not violated, in as much as no appeal has been filed by the Customs Authorities or by the Import Control Authorities against the interim order dated January 8, 1986 of the High Court directing the Customs Authorities to permit the respondents to clear the imported consignment of almonds. Allowing the Writ Petition and the Appeal, ^ HELD: 1. Respondents Nos. 10 and 11 are restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79. [97F] 2. Under the Import Policy 1978 79, dry fruits (excluding cashewnuts) could be imported by all persons for whatever purpose under the Open General Licence. No Additional Licence was required. By wrongful denial of Additional Licence to diamond exporters no damage can be said to have been suffered by them and no question of restitution could, therefore, be said to arise. The wrongful denial of the Additional Licences was wholly immaterial to the importing of dry fruits (exluding cashewnuts). The respondents have not shown that the dry fruits were placed on Open General Licence specifically for Actual Users (Industrial). Under the Import Policy 1978 79 their import was open to all persons.[94F,C] 3. The position in regard to the import of dry fruits (excluding cashewnuts) is simple and suffers from no complexity. Dry fruits (excluding cashewnuts) could be imported by all persons under Open General Licence under the Import Policy 1978 79. But under the Import Policy 1985 88 dry fruits (excluding cashewnuts and dates) are no longer open to import under Open General Licence. If dry fruits (excluding cashewnuts and dates) are regarded as items for stock and sale, the import is governed by paragraph 181(3) is Chapter XIII of the Import Policy 1985 88, which declares that import of dry fruits (excluding cashewnuts and dates) will be allowed against licences issued to dealers engaged in this trade. [94E H] 4. The diamond exporters cannot be regarded as dealers engaged in the trade of stocking and selling dry fruits (excluding cashewnuts and dates). They are, therefore, not entitled to the advantage of paragraph 181(3) of the Import Policy 1985 88. [95A B] 5. Dry fruits must be regarded as consumer goods of agricultural 90 origin. The words "agricultural origin" are used in the broadest sense. Dry fruits do not appear in Appendix 3 Part A and 5 nor can be imported under Open General Licence under the Import Policy 1985 88. In as much as they fall within item (121) of Appendix 2 Part B they are excluded from the scope of item 1 of Appendix 6, and cannot be imported as raw materials and consumables for sale to Actual Users (Industrial). "Consumables" are referred to in item 1 of Appendix 6 as goods meant for Actual Users (Industrial) "Consumer goods" in item 121 of Appendix 2 Part B can refer to dry fruits imported for supply to Actual Users (Industrial).[95F H; 96A] 6. The expression "specifically banned" occurring in the order dated April 18, 1985 of this Court determines the range of the items open to import by diamond exporters holding Additional Licences. The items excluded from import by diamond exporters under Additional Licences under the Import Policy 1985 88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy. Appendix 2 Part A is the successor of Appendix 4 (List of Absolutely Banned Items) of the Import Policy 1978 79. Appendix 2 Part B (List of Restricted Items) was also the successor of Appendix 4 (List of Absolutely Banned Items). Appendix 4 in the Import Policy 1978 79 was described as the Absolutely Banned List. [96B E] The present Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 (List of Absolutely Banned Items) under the Import Policy 1978 79. The diamond exporters holding Additional Licences were, therefore, not entitled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985 88.[96F G] 7. The diamond exporters are not entitled to take advantage of item 121 of Appendix 2 Part B for the purpose of importing dry fruits. The holders of Additional Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985 88. Dry fruits are not included in that List and, therefore, they cannot be imported under Additional Licences. They are also not entitled to the benefit extended by the judgment of this Court dated March 5, 1986 to those diamond exporters who had imported items under irrevocable Letters of Credit opened and established before October 18, 1985. [97B C] 8. An interim order cannot defeat the fundamental rights of the petitioners merely because it has not been questioned by the Customs Authorities or the Import Control Authorities. [97E] 91

N: Criminal Appeal No. 245 of 1975. Appeal by Special Leave from the Judgement and order dated 25 3 1975 of the Delhi High Court in Criminal Appeal No. 122/72. Harjinder Singh for the Appellant. E. C. Agarwala and R. N. Sachthey for Respondent No. 1 V. section Desai, B. P. Maheshwari and Suresh Sethi for Respondent No. 2. The Judgment of the Court was delivered by KOSHAL, J. This is an appeal by special leave against a judgment of the High Court of Delhi dated 25th March, 1975 convicting the appellant of an offence under clause (i) of sub section (1) of section 16 read with clause (i) of section 7 of the (hereinafter called the Act) and sentencing him to rigorous imprisonment for six months and a fine of Rs. 1000/ , the sentence in default of payment of fine being rigorous imprisonment for three months. The facts giving rise to the appeal may be briefly stated. Food Inspector V. P. Anand, (P.W.2) visited the premises of Messrs Mebrose Ice Cream and Frozen Food Co. (which carries on business in Greater Kailash No.1, a locality of New Delhi and is hereinafter referred to as the Company) on the 22nd May 1970 and bought for 315 purposes of analysis a sample of chocolate ice cream from the appellant who was one of the employees of the Company. An inventory of the sample was prepared by the Food Inspector and at the foot of the same the appellant made the following endorsement: "A sample of Chocbar Ice Cream (Chocolate Ice Cream) manufactured by Mebrose Ice Cream and Frozen Food Co., M 67, Greater Kailash, given as per above. This Ice Cream Chocolate is of one lot. This is prepared of covering Chocolate, vegetable ghee and Ice Cream. " The sample was forwarded to the Public Analyst who thus details the conclusions arrived at by him on analysis thereof, in report exhibit PE: "Total solids by Weight : 45 per cent. Protein by weight: 4.4 per cent. Chocolate: Present. Butyro refractometer reading at 40 degree C of the fat extracted from ice cream: 49.4. Baudouin test of the extracted fat: Positive. Melting point of the extracted fat: 34 degree C." In his report the Public Analyst further stated that in his opinion the sample was adulterated "as the Butyro refractometer reading at 40 degree C was round 6.4 in excess and the Baudouin test was found positive of the extracted fat. . " A complaint was lodged by the Municipal Corporation of Delhi against the appellant, the Company and its managing partner Avtar Singh in respect of an offence under section 7 read with section 16 of the Act. The trial court acquitted the Company but convicted the other two accused, sentencing each of them to rigorous imprisonment for six months and a fine of Rs. 1000/ , the sentence in default of payment of fine being rigorous imprisonment for four months. Both the convicts appealed to the Sessions Court and were acquitted by an order dated 9th March 1972 passed by an Additional Sessions Judge. The Municipal Corporation of Delhi then knocked at the door of the High Court which upheld the acquittal of Avtar Singh but convicted and sentenced the appellant as aforesaid by the impugned judgment, mainly for the reasons reproduced below: "It is established on the record beyond doubt that this endorsement was made by Kishan Chand and it contains an admission that vegetable ghee was used in the preparation of 316 the ice cream sold by him. The judgment of the learned Additional Sessions Judge reveals that the contention of the defence before him was that Vanaspati was used in the preparation of the relevant ice cream by way of emulsifier but the plea was misconceived because vegetable ghee cannot be made to serve as an emulsifying agent. A reference to the Prevention of Food Adulteration Rules, 1955 shows that as per Rule 60 'brominated ' vegetable oil is one of the recognised emulsifying and stabilising agents but Rule 61 forbids addition of brominated vegetable oil to milk or cream and without milk and/or cream manufacture of ice cream is inconceivable. Moreover, the stand of the accused from the very start has been that 'vegetable ghee ' had been used in the preparation of ice cream and not that any 'brominated ' vegetable oil got into the ice cream by way of an emulsifying or stabilising agent. The evidence would not countenance the contention raised before us. " 3. Having heard learned counsel for the parties at length we are of the opinion that the sample in question is not shown to have been adulterated within the meaning of the Act. The case is admittedly governed by the Prevention of Food Adulteration Rules 1955 which have been framed by the Central Government in exercise of the powers conferred on it by section 23 of the Act and which are hereinafter called the Rules. Rule 60 defines "emulsifying agents" and "stabilising agents" to mean substances which, when added to food, are capable of facilitating a uniform dispersion of oils and fats in aqueous media, or vice versa, and/or stabilising such emulsions. The rule then proceeds to specify numerous agents of the type mentioned and they include brominated vegetable oils. Rule 61 declares that no emulsifying or stabilising agents shall be used in any food except where their use is specifically permitted. A proviso added to the rule states that certain emulsifying or stabilising agents, including brominated vegetable oils, shall not be used in milk and cream. Appendix B to the Rules specifies the standard of quality of various articles of food. Milk and milk products are dealt with in that Appendix under Group A.11 which is divided into various items. Item A.11.01 which is further divided into sub items A 11.01.01 to A 11.01.11 contains definitions and standards of purity of various kinds of milk. Item A.11.02 defines milk products thus: "MILK PRODUCTS means the products obtained from milk such as cream, malai, curd, skimmed milk curd, 317 chhanna, skimmed milk chhanna, cheese, processed cheese, ice cream, milk ices, condensed milk sweetened and unsweetened, condensed skimmed milk sweetened and unsweetened, milk powder, skimmed milk powder, partly skimmed milk powder, khoa, infant milk food, table butter and deshi butter. " Then follow definitions of different kinds of milk products in sub items A.11.02.01 to A.11.02.21. "Cream" is defined as follows in sub item A.11.02.02: "CREAM excluding sterilised cream means the product of cow or buffalo milk or of a combination thereof which contains not less than 25.0 per cent milk fat. " Chocolate ice cream forms the subject matter of sub item A.11.02.08 which runs thus: "ICE CREAM, KULFI, AND CHOCOLATE ICE CREAM mean the frozen product obtained from cow or buffalo milk or a combination thereof or from cream, and/or other milk products, with or without the addition of cane sugar, eggs, fruits, fruit juices, preserved fruits, nuts, chocolate, edible flavours and permitted food colours. It may contain permitted stabilizers and emulsifiers not exceeding 0.5 per cent by weight. The mixture shall be suitably heated before freezing. The product shall contain not less than 10.0 per cent milk fat, 3.5 per cent protein and 36.0 per cent total solids except that when any of the aforesaid preparations contain fruits or nuts or both, the content of milk fat may proportionately reduced but shall not be less than 8.0 per cent by weight. "Starch may be added to a maximum extent of 5.0 per cent under a declaration on a label as specified in sub rule (2) of Rule 43. "The standards for ice cream shall also apply to softy ice cream." From the above examination of the provisions of Appendix B to the Rules, it is clearly made out that the standard of purity for each milk product has been separately laid down and that ice cream, kulfi and chocolate ice cream are treated as a class by themselves, which is different, for the purpose of purity from other milk products including cream. The classification employed leaves no room for doubt that 318 when the proviso to rule 61 states that certain emulsifying and stabilising agents shall not be used in milk and cream, it prohibits the use of those agents only in milk and one of its products, namely, cream and not other milk products such as malai, dahi, cheese, ice cream and chocolate ice cream. Had the rule making authority meant by the proviso to prohibit the use of the said agents in all milk products, the expression used would have been "shall not be used in milk and milk products" and not "shall not be used in milk and cream". The prohibition contained in the proviso thus does not apply to ice cream, kulfi, chocolate ice cream covered by sub item A.11.02.08, wherein it is clearly stated that these three milk products may contain permitted stabilisers and emulsifiers not exceeding, 0.5 per cent by weight. In equating the words "milk and cream" with milk and all its products, the high Court was clearly in error and this is so in spite of the fact that ice cream, kulfi and chocolate ice cream must have milk or cream as a necessary ingredient. It follows that brominated vegetable oils could have formed a part of the chocolate ice cream sold by the appellant, to the extent 0.5 per cent by weight, without the article being treated as adulterated under the Rules. Before the appellant could be convicted, therefore, it was incumbent on the prosecution to establish that the sample taken from him contained either brominated vegetable oils or other permitted stabilisers and emulsifiers exceeding 0.5 per cent by weight or that it did not conform to the prescribed standard in some other detail. Apart from falling into the error of misreading rules 60 and 61, the High Court considered the sample taken from the appellant to be adulterated by reason of the stand he had taken from the very beginning to the effect that he had used "vegetable ghee" in the preparation of the chocolate ice cream and because, according to the High Court, "vegetable ghee" was not brominated vegetable oil. This is again an erroneous approach to the problem in hand. It was for the prosecution to prove affirmatively that the sample in, question contained an ingredient which made it adulterated and any stand taken by the accused could hardly be used as evidence, unless its truth was otherwise established which is not the case. All that was made out from the evidence before the court was that the Butyro refractometer reading at 40 degree C was higher than the maximum prescribed for milk fat by 6.4 and that the Baudouin test was positive. These two factors indicated that either vanaspati or milk fat to which til oil had been added was one of the ingredients of the sample. There is not an iota of evidence on the record to show whether or not such til oil was brominated, which means that the prosecution had completely failed to prove that the ingredient objected to by it was a substance other than 319 a brominated vegetable oil or that if it was oil of that description its quantity was in excess of 0.5 per cent by weight. The Butyro refractometer reading did no doubt except the maximum of the prescribed standard by 6.4 and the Baudouin test was also positive but these factors did not indicate the presence in the sample of brominated vegetable oil beyond the prescribed maximum of 0.5 per cent by weight or of unbrominated vegetable oils. The sample of chocolate ice cream obtained by the Food Inspector from the appellant not having been shown to be adulterated, the appeal is accepted, the judgment of the High Court in so far as it relates to the appellant is reversed, the conviction recorded against and the sentence imposed upon the appellant by the High Court are set aside and he is acquitted of the charge. The bail bond executed by him shall stand cancelled. P.B.R. Appeal allowed.

Rule 60 of the Prevention of Food Adulteration Rules, 1955 defines "emulsifying agents" and "stabilising agents" to mean substances which, when added to food, are capable of facilitating a uniform dispersion of oils and fats in acqueous media or vice versa and/or stabilising such emulsions. One of the agents mentioned, among others, in the rule is brominated vegetable oils. Rules 61 declares that no emulsifying or stabilising agents shall be used in any food except where they are used as specifically permitted. The proviso to the rule states that certain emulsifying or stabilising agents including brominated vegetable oils shall not be used in milk and cream. A food inspector visited an Ice cream factory and collected a sample of chocolate ice cream. In the inventory of the sample prepared by him it was stated that "this is prepared of covering chocolate, vegetable ghee and ice cream". The Public Analyst, to whom the sample was sent for analysis, stated that the sample was adulterated "as the butyro refractometer reading at 40 degree C was found 6.4 in excess and the Baudouin test was found positive of the extracted fat. " The factory, its owner and the employee who sold the ice cream, were prosecuted under the Prevention of Food Adulteration Act. The trial court acquitted the factory but convicted and sentenced both its owner and the employee. On appeal the Additional Sessions Judge acquitted both the accused. On further appeal the High Court acquitted the factory owner but convicted the employee (appellant before this Court). The High Court pointed out that vegetable ghee could not be made to serve as an emulsifying agent because r. 61 forbids addition of brominated vegetable oil to milk or cream and without milk and/or cream manufacture of ice cream was inconceivable and that the appellant 's stand had been that vegetable ghee had been used and not that any brominated vegetable oil got into the ice cream by way of an emulsifying or stabilising agent. Allowing the appeal, ^ HELD: 1 (a) The sample of ice cream obtained from the appellant was not shown to have been adulterated within the meaning of the Act and the Rules. [316 D] (b) The prohibition contained in the proviso to r. 61 does not apply to ice cream, kulfi and chocolate ice cream covered by sub item A.11.02.08, wherein it is clearly stated that these three milk products may contain permitted stabi 314 lisers and emulsifiers not exceeding 0.5 per cent by weight. Clearly, therefore, brominated vegetable oils could have formed a part of the chocolate ice cream to the extent of 0.5 per cent by weight, without the article being treated as adulterated under the rules. What the proviso to r. 61 prohibits is the use of certain emulsifying and stabilising agents only in milk and one of its products, namely, cream and not in other milk products such a malai, dahi, cheese, ice cream and chocolate ice cream. Had the intention of the rule been to prohibit the use of the said agents in all milk products, the expression would have been "shall not be used in milk and milk products" and not "shall not be used in milk and cream". [318 C E] 2. It was for the prosecution to prove affirmatively that the sample contained an ingredient which made it adulterated and any stand taken by the accused could hardly be used as evidence, unless its truth was otherwise established. The prosecution had completely failed to prove that the ingredient objected to by it was a substance other than a brominated vegetable oil or that if it was oil of that description, its quantity was in excess of 0.5% by weight. The analyst 's report did not indicate the presence in the sample of brominated vegetable oil beyond the prescribed maximum of 0.5% by weight or of unbrominated vegetable, oils. [318G H]

Appeal No. 231/1955. Appeal from the Judgment and Decree dated February 16, 1954, of the Patna High Court in Title Suit No. 105/1953. 446 N. C. Chatterjee, Sanjeev Choudhuri and Ganpat Rai, for the appellant. C. K. Daphtary, Solicitor General of India, P. K. Chatterjee and T. M. Sen, for respondent No. 1. * Lal Narayan Sinha, Bajrang Sahai and R. C. Prasad, for respondent No. 2. 1960. August 31. The Judgment of the Court was delivered by WANCHOO J. This is an appeal from a decree of the Patna High Court. The appellant is a Public Limited Company with its registered office at Calcutta. A mining lease was granted to it by the Raja of Ramgarh on December 29, 1947, for a period of 999 years in respect of 3026 villages situate within the Ramgarh Estate and the appellant was put in possession thereof. On February 1, 1950, the appellant granted a sub lease of two of the villages comprised in its grant to one Bhagat Singh for a term of 15 years. In the meantime the Mines and Minerals (Regulation and Development) Act (LIII of 1948), (hereinafter called the Act), had come into force along with the Mineral Concession Rules, 1949 (hereinafter called the Rules), in the area in which the two villages lay. Bhagat Singh then applied to the Deputy Commissioner, Hazaribagh, for the grant of a certificate of approval under the Rules. Thereupon the Deputy Commissioner, taking the view that the sub lease granted was in contravention of the Act and the Rules, filed a complaint on September 25, 1951, before a magistrate against two directors and the secretary of the appellant charging them with the breach of r. 45 of the Rules and also rr. 47 and 49 (now r. 51) read with r. 51 (now r. 53) and section 9 of the Act. While the criminal case was going on, the appellant filed a suit challenging the validity and constitutionality of the Act and the Rules. A number of grounds were taken in support of this challenge but it is not necessary now to set out all of them, as learned counsel for the appellant has confined his arguments only to two points, namely, (i) a sub lease is not covered by the definition of the term ' mining lease ' in section 3(d) of the 447 Act and therefore the Act and the Rules do not apply to a sub lease at all, and (ii) as these Rules were made under sections 5 and 6 of the Act and not under section 7 they have no application to a sub lease granted by a lessor, even after the coming into force of the Act and the Rules, where the lessor 's own lease was of a date anterior to the coming into force of the Act and the Rules. The suit was resisted by the respondents and their defence was that the term ' mining lease ' included a sub lease and that the Rules framed under Bs. 5 and 6 of the Act were applicable to all sub leases granted after the Act and the Rules had come into force. The High Court repelled the contentions raised by the appellant against the validity and constitutionality of the Act and the Rules. It further held that the term 'mining lease ' as defined in section 3(d) of the Act included a sub lease and therefore the Act and the Rules applied to sub leases granted after the Act and the Rules came into force and it was immaterial that the lease granted to the appellant was anterior in time to the coming into force of the Act and the Rules. On this view, the suit was dismissed. Thereupon the appellant applied for a certificate which was granted and that is how the matter has come up before us. The main question that falls for consideration is whether the term 'mining lease ' as defined in section 3(d) of the Act includes a sub lease. Clause (d) of section 3 is in these terms: " mining lease ' means a lease granted for the purpose of searching for, winning, working, getting, making merchantable, carrying away, or disposing of mineral oils or for purposes connected therewith, and includes an exploring or a prospecting licence; ". There is no specific mention of a sub lease in it. But if one takes the plain meaning of the words used in section 3(d), it is clear that the term 'mining lease ' means any kind of lease granted for the purpose of searching for, winning, working, getting, making merchantable, 448 carrying away or disposing of minerals or for purposes connected therewith. It is significant that the definition does not require that the lessor must be the proprietor; and so on a fair reading it would include a lease executed by the proprietor as much as a lease executed by the lessee from such a proprietor. If we turn to the definition of 'lease ' in section 105 of the , we find that a lease of immovable property is a transfer of a right to enjoy such property made for a certain time, express or implied or in perpetuity in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value to be rendered periodically or on specified occasions to the transferor by the transferee who accepts the transfer on such terms. What a lease therefore requires is a transferor and a transferee and a transfer of immovable property on the terms and conditions mentioned in section 105. How the transferor gets his title to make a lease is immaterial so long as the transaction is of the nature defined in section 105. Applying therefore the plain words of section 3(d) of the Act and the definition of lease as contained in section 105 of the , it is perfectly clear that there is a transferor in this case, (namely, the appellant) and a transferee (namely, Bhagat Singh) who has accepted the transfer; the transaction is with respect to immovable property and creates a right to enjoy such property for a certain term and for consideration on the conditions mentioned in it. Though, therefore, the document may be termed a sub lease in view of the fact that the transferor is not the owner of the property transfer red but is itself a lessee, the transaction between the appellant and Bhagat Singh is nothing but a mining lease. The terms ' sub lease ', ' under lease ' and "derivative lease ' are used conveniently to indicate not only that the transfer is a lease but also that the transferor is not the owner of the property but is a lessee ; but the transfer as between a lessee and a sub lessee is nonetheless a lease provided it satisfies the definition of section 105. We may add that Ch. V of the , which deals with leases of immovable 449 property has nowhere made any distinction between a lease and a sub lease and all the provisions of that Chapter which apply to a lease also apply to a sublease. It is only when dealing with the rights and liabilities of the lessee that section 108(j) of the lays down that the lessee may transfer absolutely or by way of mortgage or sub lease the whole or any part of his interest in the property, and that is where one finds mention of a sub lease, namely, that it is a lease by a person who is himself a lessee. But the fact that the lessor is himself a lessee and the transaction between him and the person in whose favour he makes the transfer by way of lease is called a sub lease does not in any way change the nature of the transfer as between them. Therefore on the plain words of section 3(d) read with section 105 of the there can be no doubt that the term 'mining lease ' includes a sub lease. ' Learned counsel for the appellant referred in this connection to a number of statutes wherein a sub lease has been expressly stated to be included in the term 'lease '. In the Mines and Minerals (Regulation and Development) Act, LXVII of 1957, which has replaced the Act, the term 'mining lease ' has been defined in section 3(c) as meaning a lease granted for the purpose of undertaking mining operations and includes a sublease. The 1957 Act was enacted after the judgment of the High Court in this case and the legislature apparently thought it fit ex abundanti cautela to say that a sub lease is included within the term ' mining lease '. In the corresponding English Act also as well as the English Law of Property, 1925, a lease has been defined to include a sub lease. The fact however that in some laws a lease is defined to include a sub. lease, does not mean that a lease cannot otherwise include a sub lease. An example to the contrary is the , where the definition of the word 1 lease ' clearly includes a sub lease. Learned counsel for the appellant also relied on certain decisions in which it was held that a lease did not include a sub lease. Those decisions, however, turn on the particular terms of the enactment there under 450 consideration and are of no assistance in determining the question whether the term 'mining lease ' in the Act includes a mining sub lease. Ordinarily, a lease will include a sub lease unless there is anything to the contrary in the particular law. We may in this connection refer to the observations of Jessel, M. R., in Camberwell and South London Building Society vs Holloway (1) at p. 759: " The word `lease ' in law is a well known legal term of well defined import. No lawyer has ever suggested that the title of the lessor makes any difference in the description of the instrument, whether the lease is granted by a freeholder or a copyholder with the licence of the Lord or by a man who himself is a leaseholder. It being well granted for a term of years it is called a lease. It is quite true that where the grantor of the lease holds for a term, the second instrument is called either an under lease or a derivative lease, but it is still a lease. . .". We see nothing in the Act to indicate that the term ' mining lease ' as defined in a. 3(d) does not include a mining sub lease. On the other hand, looking to the purpose and object with which the Act was passed, it seems to us quite clear that a sub lease must be included within the term 'mining lease ' as it obviously is within the plain words of section 3 (d). That the Act was passed in the public interest is shown by the fact that it provides for the regulation of mines and oil fields and for the development of minerals. The intention was that the mineral wealth of the country should be conserved and should be worked properly without waste and by persons qualified in that kind of work. With that object in view section 5 inter alia provides for making rules as to the conditions on which mining leases may be granted and the maximum or minimum area and the period 'for which such lease may be granted as also the terms on which leases in respect of contiguous areas may be amalgamated, and the fixing of the maximum and minimum rent payable by a lessee (1) , 759 451 whether the mine is worked or not. Section 6 provides for framing of rules for the conservation and development of minerals, the manner in which any mineral or any area as respects which the grant of mining lease is prohibited may be developed and the development of any mineral resources in any area by prescribing or regulating the use of engines, machinery or other equipment, and so on. These provisions for the conservation, development and regulation of mining areas and minerals would be more or less completely frustrated if a mining sub lease was not included in the definition of the term 'mining lease ', for then all that would be necessary for a per. son who wanted to avoid the law would be to interpose an intermediary between himself and the owner and get a sub lease from him which would be free from the regulatory control of the Act and the Rules. 'We are therefore of opinion that looking at the plain words of section 3(d) and the object and the purpose for which the Act was passed, it is clear that a mining sub lease is included within the definition of the term 'mining lease ' and there is nothing in the Act which militates against this. We therefore hold that a mining sub lease made after the coming into force of the Act and the Rules is included in the term 'mining lease ' as defined in section 3 (d) and is subject to the Act and the Rules. The argument in this connection is that a. 4 of the Act provides that no mining lease shall be granted after the commencement of the Act otherwise than in accordance with the rules framed under the Act and any mining lease granted otherwise shall be void and of 'no effect. Sections 5 and 6 give power to the Central Government to make rules for purposes already set out above and refer to mining leases granted under section 4 Then comes section 7, which lays down that the Central Government may by notification in the official gazette make rules for the purpose of modifying or altering the terms and conditions of any mining lease 58 452 granted prior to the commencement of the Act so as to bring such lease into conformity with the rules framed under Be. 5 and 6. It is urged that where a mining lease has been granted before the Act and the Rules came into force, it is only the rules framed under section 7 which will affect any sub lease granted by such a lessee even though the sub lease is after the date on which the Act and the Rules came into force. Section 7 in our opinion was enacted for an entirely different purpose, as sub section (2) thereof will show. It is however not necessary to go into this matter further, for once it is held that a, sub lease is included in the term 'mining lease ', the rules made under sections 5 and 6 would apply to such a sub lease, if it is made after the Act and the Rules came into force. In the present case, the sub lease was granted after the Act and the Rules came into force in the area with which the sub lease is concerned and therefore the sub lease would be governed by the Act and the Rules. There is no question in this case of modifying or altering the terms and conditions of any mining lease granted prior to the commencement of the Act, for the Act and the Rules are being enforced with respect to a sub lease which is a mining lease, within the definition of that term in section 3(d), made 'after the Act and the Rules came into force. No change is being made by the Rules in the terms and conditions of the mining lease granted to the appellant and all that has happened is that the appellant 's directors and secretary, are being prosecuted for granting a sub lease (which is a mining lease) against the provisions of the Act and the Rules after the Act came into force. There is no force therefore in this contention of the appellant and it must be repelled. There is no force in this appeal and it is hereby dismissed with costs. , One set of hearing costs only. Appeal dismissed.

The appellant, a limited company, which was the lessee of a mining lease granted a sub lease in respect of two of the villages comprised in its grant. The secretary and two of the directors of the company were prosecuted for having contravened the provisions of the Mines and Minerals (Regulation & Development) Act, 1948, and the Mineral Concession Rules, 1949, which were framed under it. The appellant contended, firstly, that the sub lease was not covered by the definition of the term " Mining lease " of the Act and as such the Act and Rules did not apply to a sub lease at all ; and secondly, that as these rules were made under sections 5 and 6 of the Act and not under section 7 they have no application to a sub lease granted by a lessor, even after the coming into force of the Act and the Rules where the lessor 's own lease was of date anterior to the coming into force of the Act and the Rules. Held, that the definition of " Mining lease " contained in section 3(d) of the Mines and Minerals (Regulation and Development) Act, 1048, does not require that the lessor must be a proprietor and its plain language read with section 5 of the , makes it clear that a mining lease includes one executed by a proprietor as much as a lease executed by the lessee from such proprietor. The facts that the lessor is himself a lessee, and the transaction between him and the person in whose favour he makes the transfer by way of lease is called a sub lease does not in any way change the nature of the transfer as between them. Held, further, that the Rules made under sections 5 and 6 of the Act would apply to a mining sub lease if it is made after the Act and the Rules came into force.

Civil Appeal No. 1482 of 1972. Appeal by Special Leave from the Judgment and order dated 20th September 1971 of the Punjab and Haryana High Court in Income Tax Reference No. 12/71. Hardayal Hardy, K. C. Dua and Miss A. Suhhashini for the Appellant. G. C. Sharma, P. A. Francis, Anoop Sharma and P. K. Mukherjee for the Respondent. The Judgment of the Court was delivered by BHAGWATI, J. This appeal by special leave arises out of an assessment to income tax made on M/s Groz Backert Saboo Ltd. (hereinafter referred to as the assessee) for the assessment year 1962 63 the corresponding accounting year being the financial year being 31 st March, 1962. The assessee set up in collaboration with M/s Theodor Groz & Soehne and Ernst Backert, West Germany (hereinafter referred to as the West German Collaborators) a factory for fabrication and manufacture of hosiery needles and it was not disputed on behalf of the assessee that this factory started business sometime prior to the commencement of the relevant year of account. It appears that in the early part of the relevant accounting year, the assessee received from the West German Collaborators consignment of machinery costing Rs. 9,45.545/ and along with this consignment, the West German Collaborators also sent to the assessee certain goods free of cost. These goods consisted partly of raw materials and partly of semi finished needles at various stages of manufacture. The invoice in respect of this consignment was dated 4th April, 1961 and it showed only the price of the machinery consigned to the assessee and did not make any mention of the raw materials and semi finished needles supplied to the assessee along with this consignment, since these goods were supplied free of cost and no charge was made in respect of the same. 374 The Custom Authorities raised objection in respect of these goods and a separate invoice had, therefore, to be sent by the West German Collaborators showing Rs. 44,448.20 as the value of the raw materials, namely, wire and strip and Rs. 30,000/ as the value of the semi finished needles supplied to the assessee. These goods were not entered in the books of account of the business immediately on receipt by the assessee but they were brought into the books for the first time on 30th September, 1961 by making the following entries: Rs. 44,448.20 debited to the account of "Wire and Strip" and credited to the "Wire and Strip Gift Account" and Rs. 30,000/ debited to the account of "Semi processed Needles" and credited to the "Semi processed Needles Gift Account". The assesses utilised these goods in the manufacture of finished products and sold the same in the market and the sale proceeds received by the assessee were credited in the trading account maintained in the books of account of the business, since they represented revenue receipts arising from the sale of the finished products. On 31st March, 1962, being the last date of the accounting year, the assessee closed the "Wire and Strip Gift Account" and the "Semi Processed Needles Gift Account" by transferring the respective sums of Rs. 14,448.20 and Rs. 30,000/ to the credit of the "Capital Reserve Account" and debited an aggregate sum of Rs. 74,448.20 to the trading account by making corresponding credit entries in the accounts of "Wire and Strip" and 'Semi processed Needles". The net effect of these entries was that the profit of the assessee was reduced by Rs. 74,448.20. The Income Tax officer, in course of the assessment of the assessee to income tax for the assessment year 1962 63, took the view that the debit of Rs. 74,448.20 was wrongly made in the trading account as on 31st March, 1962 since no monies were expended by the assessee in acquiring the raw materials and semi finished needles, but they were received by way of gift from the West German Collaborators and hence no amount was deductible in respect of the value of these goods. The same view was taken by the Appellate Assistant Commissioner in appeal and on further appeal, the Tribunal also affirmed the same view. This led to a Reference by the Tribunal at the instance of the assessee and the following two questions were referred for the opinion of the High Court: 1. Whether on the facts and in the circumstances of the case, the sum of Rs. 74,448.20 being the actual value of raw material received from German Collaborators free of cost represented Revenue receipt ? 375 2. Whether on the facts and in the circumstances of the case, the amount of Rs. 74,448/ being the actual value of raw material received free of cost from German collaborators was rightly debited at that value to the revenue account ? The High Court misapprehended the true nature and scope of the controversy between parties and seemed to proceed on the erroneous impression that what the Tribunal had held was that the raw materials and semi finished needles received by the assessee from the West German Collaborators constituted revenue receipt and its value was, therefore, liable to be taxed as income in the hands of the assessee. The High Court held that the value of these goods could not be treated as revenue receipt because they had been received by way of gift and in any even, even if they constituted revenue receipt, they could "in no sense be income" since they were take out of the ambit of taxability by sub section (3) of section 10 of the Income Tax Act, 1961. The High Court accordingly answered the questions referred it by the Tribunal in favour of the assessee and against the Revenue. The Revenue thereupon brought the present appeal with special leave obtained from this Court. It was found as a fact by the Tribunal, and indeed there was no dispute about it, that the raw materials and semi finished needles were received by the assessee from the West German Collaborators free of cost by way of gift. These raw materials and semi finished needles were received some time in April, 1961 and it was only on 30th September, 1961 that they were for the first time introduced in the books of account of the business. There can, therefore, be no doubt that these raw materials and semi finished needles were received by the assessee as capital assets and subsequently on 30th September, 1961 they were transferred to the business as part of its stock If that be so, the cost of these raw materials and semi finished needles to the business could not be said to be nil, but, on the principle laid down by this Court in Commissioner of Income Tax vs Sherinbai Kooka(1) and subsequently followed in Commissioner of Income Tax vs Hanrepara Tea Co. Ltd.(2), it would be the market value of there raw mate rials and semi finished needled as on 30th September, 1961. It is now well settled by these decisions that where an assessee converts his capital assets into stock in trade and starts dealing in them, that able profit on the sale must be determined by deducting from the sale . (1) (2) 376 proceeds the market value at the date of their conversion into stock in trade (since this would be the cost to the business) and not the original cost to the assessee. Here, the original cost of these raw materials and semi finished needles to the assessee was undoubtedly nil because these goods were received by the assessee from the West German Collaborators free of cost, but they were introduced in the business and converted into its stock on 30th September, 1961 and, therefore, their market value as on 30th September, 1961 would represent the cost to the business and that would have to be taken into account in determining the profit arising from the sale of the manufactured products. The entries made by the assessee in the books of account of the business on 30th September, 1961 clearly reflected this opinion. The assessee debited the sums of Rs. 44,448.20) and Rs. 30,000/ representing respectively the market value of these raw materials and semi finished needles to the stock accounts of "Wire and Strip" and "Semi processed Needles" which would clearly show that these goods were treated by the assessee as having been introduced in the business as part of its stock at their market value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ . The position was no different than what it would have been if, instead of giving these raw materials and semi finished needles to the assessee free of cost, the West German Collaborators had gifted the sums of Rs. 44,448.20 and Rs. 30,0000/ to the assessee and the assessee had introduced these amounts in the business and an identical quantity of raw materials and semi finished needles had been purchased for the business with these amounts. The cost of raw materials and semi finished needles thus purchased would have been clearly liable to be deducted from the sale proceeds of the finished products manufactured out of them in determining the profit of the business. Would the position then be different if instead, the West German Collaborators gave these raw materials and semi finished needles to the assessee free of cost and the assessee introduced them in the business as part of its stock. We do not sec and distinction in principle between these two types of cases and we are clearly of the view that the cost of these law materials and semi finished needles to the business represented by the sums of Rs. 44,448.00 and Rs. 30,000/ debited in the respective accounts of "Wire and Strip" and "Semi Processed Needles" was liable to be deducted from the sale proceeds of the finished products in arriving at the profit of the business. It is true that initially on 30th September, 1961 the credit entries for the sums of Rs. 44,448.20 and Rs. 30,000 were made in "Wire and Strip Gift Account" and "Semi processed Needles Gift Account" respectively and it was only on the last date of the ac count year, namely, 31st March, 1962 that these amounts were trans 377 ferred to the credit of the Capital Reserve Account. But that cannot make any difference to the correct legal inference to be drawn from the proved facts because the nomenclature of the account or accounts in which the credit entries were made is not material but what is really decisive is that these amounts were debited to the respective accounts of "Wire and Strip" and "Semi processed Needles" as representing their real value on 30th September, 1961. These raw materials and semi finished needles were introduced in the business as part of its stock at their real value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ . The aggregate amount of Rs. 74,448.20 made up of Rs. 44,448.20 and Rs. 30,000/ was, therefore, liable to be deducted in determining the profit of the business and it was rightly debited to the trading account. We accordingly dismiss the appeal and answer the questions referred by the Tribunal in favour of the assessee and against the Revenue. The Revenue will pay the costs of the appeal to the assessee. S.R. Appeal dismissed.

During the assessment year 1962 63, the corresponding accounting year being the financial year ending 31st March, 1962, in respect of goods partly of raw materials and partly of semi finished needles gifted by their collaborators in West Germany, the respondent assessee made entries in their books of account for the first time on 30th September 1961, as follows: Rs. 44.448.20 debited to the account of 'wire and strip ' and credited to the 'wire and strip Gift Account ' and Rs. 30,000 debited to the account of 'Semi processed needles ' and credited to the 'Semi processed Needles Gift Account '. The assessee utilised these goods in the manufacture of finished products and sold the same in the market and the sale proceeds received by the assessee were credited in the trading account maintained in the books account of the business, since they represented revenue receipts arising from the sale of the finished products. On 31st March 1962, the assessee closed the above two gift, accounts by transferring the respective sums of Rs. 41,448.20 and Rs. 30,000/ to the credit of the 'Capital Reserve Account ' and debited the aggregate sum of Rs. 74,448.20 to the trading account by making corresponding contra credit entries in the accounts of 'wire and strip ' and 'Semi processed Needles '. The net effect of these entries was that the profit of the assessee was reduced by Rs. 74,448.20. The income tax officer, in the course of the assessment of the assessee to income tax for the assessment year 1962 63 took the view that the debit of Rs. 74,448.20 was wrongly made in the trading account as on 31st March, 1962 since no monies were expended by the assessee in acquiring the raw materials and semi finished needles, but they were received by way of gift from the West German Collaborators and hence no amount was deductible in respect of the value of these goods. The same view was taken by the Appellate Assistant Commissioner in appeal and on further appeal, the Tribunal also affirmed the same view. But the High Court on a reference at the instance of the assessee, held that the value of these goods could not be treated as revenue receipt because they `had been received by way of gift and in any event, even if they constituted revenue receipt, they could "in no sense be income" since they were taken out of the ambit of taxability by sub section (3) of section 10 of the Income Tax Act, 1961. The High Court accordingly answered the questions referred by the Tribunal in favour of the assessee and against the Revenue. The Revenue thereupon brought the present appeal with special leave. Dismissing the appeal, the Court ^ HELD: 1. The cost of raw materials and semi finished needles received by the assessee from their West German Collaborators and introduced in the books of the business could not be said to be 'nil", but it would 372 be their market value as on 30th September 1961. They were received by the assessee as capital assets and subsequently transferred to the business as part of its stock. [375E G] Commissioner of Income Tax vs Shirinbai Kooka, 46 I.T.R. (S.C.) 61; and Commissioner of Income Tax vs Hantepara Tea Co. Ltd I.T.R. (SC) 258; applied. Where an assessee converts his capital assets into stock in trade and starts dealing in them, the taxable profit on the sale must be determined by deducting from the sale proceeds the market value at the date of their con version into stock in trade (since this would be the cost to the business) and not the original cost to the assessee. [375G H. 376A] In the instant case, the original cost of these raw materials and semi finished needles to the assessee was undoubtedly nil because these goods were received by the assessee from the West German Collaborators free of cost, but they were introduced in the business and converted into its stock on 30th September, 1961 and, therefore, their market value as on 30th September 1961 would represent the cost to the business and that would have to be taken into account in determining the profit arising from the sale of the manufactured products. The entries made by the assessee in the books of account of the business on 30th September, 1961 clearly reflected this position. The assessee debited the sums of Rs. 44,448.20 and Rs. 30,000/ representing respectively the market value of these raw materials and semi finished needles to the stock accounts of 'Wire and Strip ' and 'Semi processed Needles, which would clearly show that these goods were treated by the assessee as having been introduced in the business as part of its stock at their market value represented by the sums of Rs. 44,448.20 and Rs. 30,000/ [376A D] Commissioner of Income Tax vs Shirinbai Kooka, 46 I.T.R. (SC) 61; and Commissioner of Income Tax vs Hantepara Tea Co. Ltd. 89 I.T.R. (SC) 258; applied 3. In principle, the position would have been the same if instead of giving raw materials and semi finished articles to the assessee free of cost the West German contractors had gifted sums of money to the assessee and the assessee had introduced these amounts in the business and an identical quantity of raw materials and semi finished products had been purchased for the business with these amounts. The cost of raw materials and semi finished articles thus purchased would have been clearly liable to be deducted from the sale proceeds of the finished products manufactured out of them in determining the profit of the business. [3376D F] In the instant case, the cost of the raw materials and semi finished needles. to the business represented by the sums of Rs. 44,448.20 and Rs. 30,000/ debited in the respective accounts of 'Wire and Strip ' and 'Semi processed Needles ' was liable to be deducted from the sale proceeds of the finished products in arriving at the profit of the business. It is true that initially on 30th September, 1961 the credit entries for the sums of Rs. 44,448.20 and Rs. 30,000/ were made in 'Wire and Strip Gift Account ' and 'Semi processed Needles Gift Account ' respectively and it this only on the last date of the account year, namely, 31st March, 1962 that these amounts were transferred 373 to the credit of the Capital Reserve Account. But that cannot make and difference to the correct legal inference to be drawn from the proved facts because the nomenclature of the account or accounts in which the credit entries were made is not material but what is really decisive is that these amounts were debited to the respective accounts of 'Wire and Strip ' and Semi processed Needles ' as representing their real value on 30th September, 1961. These raw materials and semi finished needles were introduced in the business as part of its stock at their real value represented by the sums of Rs. 44,448.20 and 30,000/ . The aggregate amount of Rs. 74,448.20 made up of Rs. 44,448.20 and Rs. 30,000/ was, therefore, liable to be deducted in determining the profit of the business and it was rightly debited to the trading account. [376F H, 377A C]

Criminal Appeal No. 387 of 1990. From the Judgment and Order dated 12.1.1984 of the Gujarat High Court at Ahmedabad in Misc. Application No. 48 of 1982. S.H. Sheth and S.C. Patel for the Appellant. B. Datta, Sunil Dogra and P.H. Parekh for the Respondents. The Judgment of the Court was delivered by FATHIMA BEEVI, J. Leave granted. The appellant is aggrieved by the judgment of the High Court holding that sanction of the State Government as required under Section 197, Cr. P.C., is not necessary for taking cognizance of the offences against the appellant on the basis of the complaint filed by the respondent. The appellant is an employee of the Municipal Corporation, Ahmedabad. While holding the post of Laboratory Officer, the State Government by a Notification dated 21.12.1966.under Section 8 of the Food Adulteration Act, 1954 appointed the appellant as a Public Analyst for the local area comprised within the limits of the Corporation. The complaint was filed by the respondent before the Magistrate for the of fences punishable under Sections 465,468 and 201, I.P.C., alleged to have been committed by the appellant while exer cising the functions as Public Analyst. 513 The appellant moved the High Court under Section 482, Cr. P.C., for quashing the criminal proceedings on the ground that, he being a public servant removable from office only by the State Government the Magistrate could not take cogni zance of the offence alleged to have been committed while discharging the duties as Public Analyst without the requi site sanction under Section 197, Cr. The High Court rejected this contention and dismissed the petition. Under Section 197(1), Cr. P.C., when a public servant not removable from his office save by or with the sanction of the Government, is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction of the Government. The section extends immunity from irre sponsible, frivolous and vexatious prosecution. The privi lege of immunity from prosecution without sanction extends only when the accused is a public servant of the kind men tioned therein. He must be a public servant as defined in Section 21 of the Indian Penal Code and not removable from his office save by or with the sanction of the State Govern ment or the Central Government as the case may be. The offence must also be one committed by the accused while acting or purporting to act in the discharge of his official duty. Section 21, I .P.C., reads as under: 21. "Public servant" The words "public servant" denote a person falling under any of the descriptions hereinafter following, namely: Twelfth . Every person (a) in the service or pay of the Government or remu nerated by less or commission for the performance of any public duty by the Government; (b) in the service or pay of a local authority, a corporation established by Or under a Central, Provincial or State Act or a Government company as defined in Section 6 17 of the ( 1 of 1956). Section 197, Cr. P.C., clearly intends to draw a line between public servants and to provide that only in the case of the higher ranks 514 should the sanction of the government to their prosecution be necessary. While a public servant holding an office of the kind mentioned in the Section is as such public servant appointed to another office, his official acts in connection with the latter office will also relate to the former of fice. The words "removable from office" occurring in Section 197 signify removal from the office he is holding. The authority mentioned in the section is the authority under which the officer is serving and competent to terminate his services. If the accused is under the service and pay of the local authority, the appointment to an office for exercising functions under a particular statute will not alter his status as an employee of the local authority. The appellant herein is admittedly the Laboratory Offi cer in the service and pay of the Municipal Corporation of Ahmedabad. The appointment as Public Analyst by the Govern ment does not confer on him the status of a public servant or an officer under the service and pay of the Government. He is not remunerated by any fee by the Government. The appellant was not the employee of the State Government and was not employed in connection with the affairs of the State. He was not holding any public office in connection with the affairs of the State. The State Government had merely entrusted him with the functions of a Public Analyst which could be granted and taken by an administrative act. It was on account of his being employed by the Municipal Corporation that he was appointed as a Public Analyst by the Government. He is not appointed as Public Analyst in the cadre against any post. The Prevention of Food Adulteration Act also does not contain any deeming provision to treat the Public Analyst as a public servant. The appellant is holding an office from which he is removable by the Local Authority and not by the Government. The cancellation of the appointment as Public Analyst would not amount to removal from office. Section 197, Cr. P.C., in this context contemplates the removal of the appellant from the office of the Laboratory Officer and not his transfer or removal from the office of the Public Analyst. The removal of the appellant from the office of Public Analyst would not affect his office as a Laboratory Officer under the Local Authority and would not amount to removal from office. The appellant is not therefore a public servant removable only by the State Government. The High Court was right in its view. We accordingly dismiss the appeal. Y. Lal Appeal dismissed.

The appellant, an employee of the Municipal Corporation Ahmedabad was holding the post of Laboratory Officer and while he was so holding the post, he by a Notification dated 21.12.1966, issued by the State Government, was appointed as a Public Analyst for the local area within the municipal limits of the Corporation. The respondent filed a complaint before the Magistrate for offences punishable under Sections 465, 468 and 20 1. I.P.C. alleged to have been committed by the appellant while exercising his functions as a Public Analyst. The appellant moved the High Court under Section 482, for quashing the criminal proceedings sought to be initiated against him by the said complaint. His principle contention was that he being a public servant removable from office only by the State Government, the magistrate could not take cognizance of the alleged offences and that previ ous sanction of the State Government as contemplated under section 197, Cr. P.C. was necessary. The High Court rejected the contention of the appellant and dismissed the petition. He has filed this appeal after obtaining special leave from the Court. Dismissing the appeal, this Court, HELD: The privilege or immunity from prosecution without sanction extends only when the accused is a public servant of the kind mentioned in Section 197, Cr. He must be a public servant as defined in Section 21 of the Indian Penal Code and not removable from his office save by or with the sanction of the State Government or the Central Government as the case may be. The offence must also be one committed by the accused while acting or purporting to act in the discharge of his official duty. Section 197, Cr. P.C. clearly intends to draw a line between public servants and to pro vide that only in the case of the higher ranks should the sanction of the Government to their prosecution be neces sary. [513C D, H] 512 The words "removable from office" occurring in Section 197 signify removal from the office one is holding. [514B] In the instant case, the appellant was not holding any public office in connection with the affairs of the State. The State Government had merely entrusted him with the functions of a Public Analyst which could be granted and taken by an administrative Act. It was on account of his being employed by the Municipal Corporation that he was appointed as a Public Analyst in the cadre against any post. The Prevention of Food Adulteration Act also does not con tain any deeming provision to treat the Public Analyst as a public servant. [514D E] The appellant is not therefore a public servant remova ble only by the State Government. [514G]

l Appeal Nos. 2436 37 of 1987 etc. From the Judgment and Order dated 2.4.1983 of the Cus toms, Excise and Gold Control Appellate Tribunal, New Delhi in Appeal No. ED (T)/SB/64/76 D and ED(SB)(T) A. No. 61/76 D in Order Nos. D 169 and 170 of 1983. V.C. Mahajan, A. Subba Rao and C.V. Subba Rao for the Appellant. Soli J. Sorabjee, P.H. Parekh, M.K. Pandit and J.P. Pathak for the Respondent. The Judgment of the Court was delivered by RANGANATHAN, J. These are three appeals by the Collector of Central Excise. Two of them relate to Ahmedabad and one to Bombay. The Ahmedabad appeals are in the case of M/s Ashoka Mills Ltd. and the Bombay appeal is in the case of M/s Mafatlal Fine Spinning and Manufacturing Co. Ltd. These appeals raise a very interesting question. 88 The assessee respondents are companies manufacturing yarn and cotton fabrics, the manufacture of yarn being a step in the process of. the manufacture of cotton fabrics. Cotton fabrics (which expression included all fabrics con taining more than 40% by weight of cotton) were subject to excise duty on an ad valorem basis under item 19 of the tariff in the First Schedule to the Central Excises & Salt Act, 1944 (hereinafter referred to as 'the Act '). "Yarn, all sorts, not elsewhere specified . . "became liable to duty under item 18E of the First Schedule under the Finance Act, 1972 w.e.f. 17.3.72. The consequence was that, from 17.3.72, the yarn which was being produced by the appellants became liable to duty under item 18E while the fabric manu factured by them was dutiable under item 19. The Central Government decided to give two categories of assessees the benefit of the provisions of Rules 96 V & W of the Central Excise Rules: (i) assessees manufacturing woollen yarn; and (ii) assessees manufacturing cotton yarn or yarn falling under item 18E and using the same wholly or partly, in the manufacture of fabrics in their own factory. These rules appeared in Chapter V of the Rules as Section E. VI, headed "Cotton yarn, woollen yarn, yarn falling under tariff item 18E Special Procedure". This Section in the rules was inserted by notification No. 110/61 dated 20.4.61 and omitted by notification No. 146/77 dated 18.6.77. They read thus: "96 V Application to avail of special proce dure , (1) Where a manufacturer who manufactures cotton yarn, yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1 of 1944) or woollen yarn and in the case of cotton yarn of yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1 to 1944) uses the whole or part of the yarn manufac tured by him in the manufacture of cotton fabrics in his own factory, makes in the proper form an application to the Collector in this behalf the special provisions contained in this section shall, on such application being granted by the Collector, apply to such manufacturer in substitution of the provisions contained elsewhere than in this section for the period in respect of which the application has been so granted. (2) Such application shall be made so as to cover a period of not less than six consecutive calendar months, but may 89 be granted for a shorter period in the discre tion of the Collector. (3) If at any time during such period, the manufacturer does not want to avail himself of the special provisions contained in this section, he shall give a notice in writing to the proper officer of his intention at least one week in advance; and if he fails to give such notice he shall be precluded from avail ing himself of such provisions for a period of 6 months from the date of such failure. 96 W. Discharge of liability for duty on payment of certain Sum, (1) Having regard to the average production of cotton fabrics from one kilogram of cotton yarn or yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1. to 1944) or the average prevail ing prices of woollen yarn the Central Govern ment may, by notification in the Official Gazette, fix from time to time a rate per square metre of the cotton fabrics produced or per kilogram of the woollen yarn produced, as the case may be, subject to such conditions and limitations as it may think fit to impose, and if a manufacturer whose application has been granted under rule 96V pays a sum calcu lated according to such rate, in the manner hereinafter laid down, such payment shall be a full discharge of his liability for the duty leviable on the quantity of cotton yarn of yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1 of 1944) manufactured by him and used in the manufacture of fabrics in his factory or the quantity of woollen yarn produced by him: 1. Provided that if there is an alteration in the rates of duty and/or in the limit of exemption, the sum payable shall be recalcu lated on the basis of the revised rates and/or exemption limit from the date of alteration and liability for duty leviable on the quanti ty of cotton yarn or yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1 to 1944) used in the manufacture of cotton fabrics or woollen yarn produced shall not be discharged unless differential duty is paid. 90 (a) in the case of such cotton yarn, or yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1 of 1944) as on the date of clearance of the aforesaid cotton fabrics, and (b) in the case of woollen yarn, as on the date of clearance of such woollen yarn from the factory of the manufacturer; should, however, the amount of duty so recalculated be less than the sum paid, the balance shall be refunded to the manufacturer. (2) The rate specified under sub rule (1) shall be separately and distinctly notified, and shall be separately and distinctly ap plied, in respect of (i) cotton yarn and (ii) woollen yarn. (3) The sum payable under sub rule (1) in respect of cotton yarn shall be paid by the manufacturer along with the duty on fabrics in the manner prescribed in rule 52. Provided that where cotton fabrics are allowed to be removed in bond under rule 96 D from one factory to another (hereinafter referred to as the processing factory) for processing and the cotton fabrics also processed are cleared from the processing factory, the duty payable under sub rule (1) shall be paid by the licencee of the processing factory. A notification as envisaged by Rule 96V was issued, being notification No. 62/72, on 17.3.72. It reads as follows: "In pursuance of rule 96 W of the Central Excise Rules, 1944, the Central Government hereby directs that the rate of duty in re spect of yarn containing partly more than 40 per cent by weight of cotton and partly any other fibre or fibres, the wool or silk con tent being less than 40% by weight of such yarn (where such yarn contains wool or silk) and falling under Item No. 18E of the First Schedule to the and of the description specified in column (2) of the Table hereto annexed, shall be the rate specified in the corresponding entry in column (3) of the said Table. 91 THE TABLE section No. Description of yarn Rate (1) (2) (3) Paise per square metre of the fabric made. Yarn used in making super 20.00 fine fabrics. Yarn used in making fine fabrics. 12.00 3. Yarn used in making medium 6.00 fabrics. Yarn used in making 4.40 medium fabrics. Yarn used in making coarse fabrics. 2.20 6. Yarn used in the manufacture 4.40 of cotton fabrics generally described as Malimo type fabrics or fabrics in which warp and weft yarns are connected and fastened together by chain stiches baned against each other. Yarn used in making embriodery The duty for the in the place in steps or in time being leviable motifs. on yarn contained in the base fabrics if not already paid. Yarn used in making fabrics do impregnated or coated with preparation of cellulose derivations or of other artificial plastic materials. Provided that if the manufacturer elects to avail himself of the special provisions con tained in rule 96 W aforesaid, the procedure set out in that rule in this behalf shall uniformly apply to all the yarn of the de scription specified in the above table and used by him in the production of cotton fab rics in his factory. 92 Explanation: For the purpose of this notification (i) "base fabrics" shall have the same meaning as assigned to it in tariff item No. 19 of the first schedule to the Central Excises & Salt Act, 1944 (1 to 1944) (ii) the average count of yarn in a fabric shall be deemed to be the count of all yarn contained in such fabric. " Rules 96 V & W, it will be noticed, deal with two items: cotton yarn or yarn falling under item 18E of the First Schedule and woollen yarn. Normally, under the Schedule to the Act, woollen yarn was being charged to excise duty on an ad valorem basis while cotton and other yarn was being assessed on weight basis. The rules cited above and the notification referred to, however, provided an alternative, on the application of the assessee. On a notification being issued and the assessee 's option being exercised, duty on woollen yarn became payable on the basis of weight at the rates prevalent at the time of clearance of the yarn from the factory. If the rates had gone up in the meantime, the assessee had to pay the differential duty and if the rates had gone down, the assessee would be entitled to a refund. Thus the assessee was given the option of paying the duty on the woollen yarn on weight basis at the rates prevalent on the date of their clearance. We are not concerned with this here. So far as cotton and other yarn is concerned, the duty, in cases governed by a notification and application under this Section, would be levied not on the weight of the yarn manufactured but on the extent of fabric manufactured from such yarn. Naturally, this duty could be calculated only after the fabric had been manufactured, on the basis of the area of cloth or fabric manufactured. This would create a doubt whether the duty on yarn under the scheme is payable on the production of yarn or on the date of clearance of the fabrics. Sub section (3) of section 96 W clears this doubt. It provides that the duty would be paid along with the duty payable on the fabrics under rule 52. This clearly shows that it is not the incidence of liability that is shifted but only the collection of the duty. The purpose of the rules and notifications may be briefly set out thus. As already mentioned both yarn and fabrics are individual items exigible to duty. Two levies on the yarn as well as on the cotton fabrics, on different bases, may not only impose an undue burden on 93 the manufacturer but may also unnecessarily complicate the process of collection of duty at two stages. The Act, there fore, envisages what has been described as a scheme of "compounded levy". Under this scheme, the excise duty on the yarn is collected only as and when the manufactured goods, namely, cotton fabrics are cleared from the factory and no duty is collected at the stage of the production or manufac ture of yarn. The duty paid as per this notification is treated as a full discharge of the assessee 's liability for the duty leviable on the yarn used by the assessee for manufacture of fabrics in its factory. To sum up briefly, rules 96 V and 96 W, together with the notification issued thereunder are concerned only with the issue of the excise duty leviable in respect of yarn and what they seek to achieve are: (a) the alteration of the basis of duty from a rate calculated on the weight of yarn produced to a calculation on the basis of the area of fabric manufactured therefrom; (b) the postponement of the collection of the duty till the point of clearance of the fabrics; and (c) the levy of the duty at rates prevalent not on the date of production of the yarn but on the date of clearance of the fabric. If the notification of 17.3.1972 had continued in force, there would have been no difficulty in its application. However, on 24.7.1972, the Government issued Notification No. 169 of 1972, the result of which was that the special procedure referred to above was made inapplicable to the type of yarn manufactured, used for weaving and cleared by the appellants. The short question in these appeals is as to the effect of this omission in respect of yarn produced after 17.3.72 and cleared for captive consumption before 24.7.72 but lying in various departments at various stages of manufacture or in the form of cotton fabrics not yet cleared as on 24.7.72. The Department has taken the view that in respect of the yarn manufactured between 17.3.72 and 23.7.72 the assessee is liable to pay the normal duty pay able on yarn under Item 18E so long as the fabrics manufac tured out of such yarn remained uncleared from the factory as on 24.7.72. On the other hand, the assessee 's contention is that excise duty on yarn is attracted as soon as it is produced and cleared for captive consumption though kept in abeyance and collected, so long as the notification was in force, till the corresponding fabrics were cleared. The assessee is not liable to pay any higher duty in respect thereof unless one could bring it within the terms of the proviso to the notification. The short contention is that 94 the proviso applies only in a case where the notification under section 96 W continues to be in force and there is a change in rates under the scheme of compounded levy intro duced by the notification but not where the difference in rates is one between those prevailing on the date of produc tion of yarn under the scheme and the date of clearance of the goods after the abandonment of the scheme. The Customs, Excise & Gold Control Appellate Tribunal (CEGAT) accepted the contention of the assessee following its earlier decision dated 2.4.1983 in M/s Raipur Manufac turing Co. vs Collector of Central Excise, Ahmedabad, It held that the yarn cleared for captive consumption during the period from 17.3. 1972 to 23.7. 1972 in terms of the special procedure was entitled to the bene fit of the rates fixed under Notification No. 62/72 CE dated 17.3.1972 and that no further duty was payable on that quantity of the yarn. A consequential refund to the appel lants was directed. We notice that this order of the Tribu nal was followed by another Bench of the Tribunal in its order dated 20.7.1983 and this decision had been reported much earlier as Crown Spinning & Manufacturing Co. Ltd. vs Collector, The Collector, Central Excise has preferred these appeals. We have come to the conclusion that the view taken by the Tribunal has to be upheld. 'Yarn ' is an excisable com modity and it is common ground before us that, normally and but for the special procedure and notification, duty thereon is leviable at the point of production and clearance for captive consumption. On that view, the duty attaches itself at the point of production and clearance of the yarn. The notification does not alter this position. it does not shift the incidence of duty from yarn to the woven fabric. It still talks only of the liability of the yarn to duty and proceeds to provide only for its postponed collection. If we are right on this, the duty on such yarn produced between 17.3.72 and 24.7.72 has to be determined in accordance with the rates specified in the notification, though such rates may have to be calculated in terms of the area of the fabric cleared on or after 24.7.1972. The duty cannot be determined at the rates specified for yarn under item 18E as applicable on the dates of clearance of the fabric manufactured by using the yarn. To hold otherwise would really mean holding that the incidence of duty on the yarn under the notifica tion arises only on the date of clearance of the manufac tured fabric. This, in our view, is not the effect of the notification. The proviso to Rule 96 W does not help the revenue. It only 95 contemplates cases where there is a change in the rates prescribed under the notification between the date of pro duction of the yarn and the date of clearance of the fabric. In such a case, an assessee may well contend, but for the proviso, that the duty having attached itself on the date of production of the yarn, it has to be calculated only at the rates then prevalent and should not be recalculated at the rates prevalent on the dates of clearance of the fabrics. The proviso precludes such an argument. It would be entirely superfluous and redundant if, as contended for by the reve nue, the liability to pay duty on the yarn itself arises only on the date of clearance of the fabrics. It is intended to provide specifically that it is the intention of the Government that in such a case, the rates prevalent on the date of clearance of the fabric should govern. The word 'recalculated ' used in the proviso also supports such a conclusion. This word would be inappropriate if the notifi cation envisaged the levy of duty at the point of clearance of the fabrics, as contended for by the Revenue, for in that event, there would be only one calculation as at that point of time and no question of recalculation would arise. In other words, the notification grants a concession but only subject to change in these concessional rates that may occur until the fabrics made out of the yarn are cleared. We do not think that the words of the proviso can be extended to cover a case where the notification itself has ceased to apply by the date of clearance of the fabric. To apply the proviso to such a case would result in its ap plicability to a totally different situation. It would involve a comparison of unlikes. It would mean the substitu tion of one set of rates prescribed in connection with a special procedure on the basis of the area of cloth by another set of rates applicable to yarn in the normal course which is to be worked out on the basis of weight. This involves a mix up of two totally different schemes of levy of duty on yarn. We do not think it is correct to place this construction on these provisions. In our opinion, the normal rates de hors the notification will apply only in respect of yarn produced on or after 24.7.72 and not to yarn produced between 17.3.72 and 23.7.72. The assessees having paid at the normal rates in respect of the latter period were right ly held entitled to seek a refund. We may also point out that the best that can be said for the department is that the system of compounded levy ceased only on 24.7.1972. This means that the normal rules will become applicable. But the normal duty on yarn, effective from 24.7.72, cannot be retrospectively applied to the yarn which had been authorisedly removed from the spindles for captive consumption prior to that date. The fact that 96 the clearance of the fabrics made of such yarn was, after. 24.7.72 would be irrelevant in computing such normal duty for, yam. There is no principle or statutory language that compels an assessee to be deprived of the concessional rate that has been made available to it, under a special proce dure, in respect of the yam produced by it and utilised for captive consumption. For these reasons, we agree with the view taken by the Tribunal and dismiss these appeals. We, however, make no order as to costs.

The department took the view that in respect of the yarn manufactured between 17.3.72 and 23.7.72 the assessee is liable to pay the normal duty payable on yarn under Item 18E so long as the fabric manufactured out of such yarn remained uncleared from the factory as on 24.7.1972. On the other hand the assessee 's contention was that excise duty on yarn is attracted as soon as it is produced and cleared for captive consumption. The Customs, Excise & Gold Control Appellate Tribunal (CEGAT) accepted the contention of the assessee and held that the yarn cleared for captive consumption during the period from 17.3.72 to 23.7.72 in terms of the special procedure was entitled to the benefit of the rate fixed under Notification No. 62/72 CE dated 17.3.72 and that no further duty was payable on that quantity of the yarn and a consequential refund to the appellants was directed. Ag grieved by the order of the Tribunal the department pre ferred these appeals to this Court. While dismissing the appeals and upholding the view taken by the Tribunal, this Court, HELD: Rules 96 V & W of the Central Excise Rules, deal with two items: cotton yarn or yarn falling under item 18E of the First Schedule and woollen yarn. Normally, under the schedule to the Act, woollen yarn was being charged to excise duty on an ad valorem basis while cotton and other yarn was being assessed on weight basis. [92C] Yarn is an excisable commodity and but for the special procedure 87 and notification, duty thereon is leviable at the point of production and clearance for captive consumption. The duty attached itself at the point of production and clearance of the yarn. The notification does not alter this position. It does not shift the incidence of duty from yarn to the woven fabric. [94E F] The proviso to Rule 96 W does not help the Revenue. It only contemplates cases where there is a change in the rates prescribed under the notification between the date of pro duction of the yarn and the date of clearance of the fabric. [94H; 95A] The words of the proviso can be extended to cover a case where the notification itself has ceased to apply by the date of clearance of the fabric. To apply the proviso to such a case would result in its applicability to a totally different situation. It would involve a comparison of un likes. [95E] Crown Spinning & Manufacturing Co. Ltd. vs Collector, , referred to.

vil Appeal Nos. 1926 50 of 1986 etc. From the Judgment and Order dated 20.2. 1986 of the Bombay High Court in O.S. Appeal Nos. 616, 673,674 to 692,694 and 725 of 1985. Soli J. Sorabji, K.K. Singhvi, A.K. Gupta, B. Bhushan, N.P. Mohindra, J.P. Cama, Mukul Mudgal, A.M. Khanwilkar, K.V. Murrup Menon, Mrs. V.D. Khanna, M.G. Ramachandran, Pratap H. Toprani, Sanjeev Anand and A.S. Bhasme for the appearing parties. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. It appears that there were serious complaints about the service conditions of about 70,000 persons working as Security Guards in various factories and establishments in Greater Bombay and Thane Industrial Com plex, the majority of whom were employed through about 250 Security Agencies operating in those areas. The complaints related not merely to insufficient remuneration paid to them by the agencies, but also to insecurity of service and other forms of exploitation. There was a sample survey conducted by the Government of Maharashtra to ascertain the extent of exploita 23 tion and to secure information regarding the service condi tions of the Security Guards. The sample survey revealed that most of the agencies were not registered under the Shops and Establishments Act. There was only one registered union but that union accounted for membership of 2200 only. It was found that most of the Security Guards did not enjoy the benefit of any Provident Fund Scheme or any scheme of Gratuity. Most of them were not covered by the Employees ' State Insurance Scheme and had no medical facilities. Leave facilities were inadequate. Rest intervals were not properly provided. Wages were low and only a few agencies paid over time and bonus. Most of them did not also have either drink ing water facility, canteen facility or transport facility. A very meager percentage of Guards were provided with living quarters. It was recommended that it was absolutely neces sary to prevent exploitation of the unprotected Security Guards and to provide them with better service conditions. Pursuant to the report of the committee which made the sample survey, the Government issued the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Ordinance. The Ordinance was replaced by the Maharashtra Private Security Guards (Regulation of Employment and Wel fare) Act, 1981. The vires of the Act were challenged in various writ petitions filed in the High Court of Bombay by Security Agencies. They were dismissed by the High Court and a petition for special leave to appeal under article 136 of the Constitution was dismissed by the Supreme Court on January 5, 1983. While dismissing the special leave petition, the Supreme Court gave the following directions: "It appears that some of the petitioners have applied to the State Government to accord exemption to them from the operation of the provisions of the Private Security Guards (Regulation of Employment and Welfare). Scheme, 1981 and those applications are under the consideration of the State Government. We, therefore, direct that the above scheme shall not be enforced as against the petitioners herein till the end of January 1983. The State Government should dispose all applications made by the petitioners before January 31, 1983. " This order was subsequently modified in the following manner: "The order dated January 5, 1983 is modified by deleting the entire portion of the order following upon the words "these special leave petitions are dismissed. " The scheme will be brought into force forthwith. " 24 In the judgment of the learned Single Judge who dis missed the writ petitions initially, the learned Judge had held that it was competent for security agencies to seek exemption from the operation of the provisions of the Act. As many as 139 security agencies applied to the Government under sec. 23 of the Act for grant of exemption from the provisions of the Act. These applications were first screened by the Advisory Committee who recommended that exemption might be granted to 21 agencies. The cases of four other agencies which were not recommended by the Advisory Committee were again investigated by the Labour Commissioner who recommended that these four agencies also might be granted exemption from the provisions of the Act. On June 28, 1984, the Government of Maharashtra finally rejected all the applications for exemption filed by the various security agencies. Several security agencies thereupon filed writ petitions in the High Court of Bombay. The twenty five writ petitions filed by the twenty one agencies whose cases were recommended by the Advisory Committee and the four agencies whose cases were recommended by the Labour Commissioner were admitted by the High Court and the rest were dismissed in limine. The twenty five writ petitions which were admitted were also finally dismissed on July 11, 1985 by a learned Single Judge. On appeals preferred by the twenty five secu rity agencies, a Division Bench of the Bombay High Court directed the State Government to consider afresh the appli cations for exemption. An objection raised on behalf of the Security Guards Board and the Government of Maharashtra that security agencies could not seek exemption under sec. 23 of the Act was overruled. The Bombay High Court took the view that the applications had been rejected as a result of the policy decision not to grant exemption to any security agency and that this was wrong. The High Court held that each application for exemption had to be considered on its own merits and so disposed of. Hence the direction to the Government to consider the applications afresh. The Security Guards Board constituted under sec. 6 of the Act has preferred these twenty five appeals against the judgment of the Bombay High Court. Shri K.K. Singhvi, learned counsel for the appellant, the Security Guards Board for Greater Bombay and Thana District, argued that sec. 23 of the Act did not contemplate the grant of exemption in favour of a security agency and therefore, the applications for exemption were liable to be rejected on that ground alone. He further submitted that the High Court was wrong in holding that the applications had 25 been rejected on the basis of any policy decision. They were rejected after consideration of all the applications on merits. If there was a policy decision such a decision was arrived at on a consideration of all the applications for exemption and it was that none of the applications deserved to be allowed. Shri Soli Sorabji and other learned counsel, who followed him, argued that the Act did not contemplate the abolition of the agency system as such and it was only meant to regulate and provide better conditions of service for Security Guards. Wherever the conditions of service were better than those proposed under the Scheme, the Government was under a duty to grant the necessary exemption so that the employees may have the benefit of the advantageous conditions of service. According to them, this result flowed from a perusal of the Act, in particular sees. 22 and 23. It was also urged that the High Court was right in its conclu sion that the applications for exemption had not been re jected on merits but because of a policy decision. We may now proceed to consider the rival submissions with reference to the provisions of the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981. The preamble to the Ordinance which preceded the Act recited, ". . and whereas the Governor of Maharashtra is satisfied that circumstances exist which render it necessary for him to take immediate action to make a law for regulat ing the employment of private Security Guards employed in factories and establishments in the State of Maharashtra and for making better provision for their terms and conditions of employment and welfare, through the establishment of a Board therefore, and for matters connected therewith . . ". The long title of the Act is, "An Act for regulating the employment of private Security Guards employed in factories and establishments in the State of Maharashtra and for making better provisions for their terms and conditions of employment and welfare, through the establishment of a Board therefore, and for matters connected therewith." Sec. 1(4) makes the Act applicable, "to persons who work as Security Guards in any factory or establishment, but who are not direct and regular employees of the factory or the establishment as the case may be." Secs. 2(1), (3), (4), (5), (8) and (10) defines the expres sions "agency", "employer", "establishment", "facto ry", "principal employer" and "Security Guard" as follows: " "agency", or "agent", in relation to a Security Guard, 26 means an individual or body of individuals or a body Corporate, who undertakes to execute any security work or watch and ward work for any factory or establishment by engaging such Security Guard on hire or otherwise, or who supplies such Security Guards either in groups or as an individual, and includes a sub agency or a sub agent; "employer", in relation to a Security Guard engaged by or through an agency or agent, means the principal employer, and in relation to any other Security Guard, the person who has ultimate control over the affairs of the factory or establishment and includes any other person to whom the affairs of such factory or establishment are entrusted, wheth er such person is called an Agent, Manager or by any other name prevailing in the factory or establishment; "establishment" means an establishment as defined in clause (8) of section 2 of the Bombay Shops and Establishments Act, 1948; "factory" means a factory as defined in clause (m) of section 2 of the ; "principal employer" means an employer who has engaged Security Guards through an agency or agent; "Security Guard" or "private Security Guard" means a person who is engaged or is to be engaged through any agency or an agent, wheth er for wages or not, to do security work or watch and ward work in any factory or estab lishment and, includes any person, not em ployed by any employer or agency or agent, but working with the permission of, or under an agreement with, the employer or agency or agent, but does not include the members of any employer 's family or any person who is a direct and regular employee of the principal employer;" Section 3 empowers the State Government for the purposes of ensuring an adequate supply and full and proper utilisation of Security Guards in factories and establishments and generally for making better provisions in the terms and conditions of employment of such workers, to make one or more schemes to provide for the registration of emp 27 loyers and Security Guards in any factory or establishment and to provide for the terms and conditions of employment of registered Security Guards and to make provisions for the general welfare of such Security Guards. The matters in regard to which provisions may be made in the scheme are also set out in sec. 3(2) (a) to (n). We may mention that clause (d) of sec. 3(2) in particular relates to terms and conditions of employment, including the rates of wages, hours of work, maternity benefit, over time payment, leave with wages, provision for gratuity and conditions as to weekly and other holidays and pay in respect thereof. We should also mention here that sec. 3(2)(g) provides that the scheme may prohibit, restrict or otherwise control the employment of Security Guards to whom the scheme does not apply and the employment of Security Guards by employers to whom the scheme does not apply. 3(3) provides that the scheme may further provide for punishment for a contraven tion of any provision of the scheme with imprisonment or with fine. 4 prescribes the procedure for making, varying or revoking a scheme. 6 provides for the con stitution of a Board for the Security Guards in any area. Sec. 8 prescribes the powers and duties of the Board. 15 provides for the constitution of an Advisory Committee. 19, 20 and 21 provide for the application of Workmen 's Compensation Act, Payment of Wages Act and Maternity Benefit Act to Security Guards. 22 and 23 are important. 22 provides for the preservation of existing rights and privileges if they are more favourable and sec. 23 provides for exemption from the provisions of the Act. These provi sions are important for our present purposes. They are as follows: "22. Nothing contained in this Act shall affect any rights or privileges, which any registered Security Guard employed in any factory or establishment is entitled to, on the date on which this Act comes into force, under any other law, contract, custom or usage applicable to such Security Guard, if such rights or privileges are more favourable to him than those to which he would be entitled under this Act and the Scheme: Provided that, such Security Guard shall not be entitled to receive any corre sponding benefit under the provisions of this Act and the Scheme. The State Government may, after consulting the Advisory Committee, by notification in the Official Gazette, and subject to such condi tions and for such period 28 as may be specified in the notification, exempt from the operation of all or any of the,provisions of this Act or any Scheme made thereunder, all or any class or classes of Security Guards employed in any factory or establishment or in any class or classes of factories or establishments, if in the opinion of the State Government, all such Security Guards or such class or classes of Security Guards are in the enjoyment of benefits, which are on the whole not less favourable to such Security Guards than the benefits provided by or under this Act or any Scheme made thereun der: Provided that, before any such notification is issued, the State Government shall publish a notice of its intention to issue such notification, and invite objections and suggestions in respect thereto and no such notification shall be issued until the objec tions and suggestions have been considered and a period of one month has elapsed from the date of first publication of the notice in the Official Gazette: Provided further that, the State Government may, by notification in the Offi cial Gazette, at any time, for reasons to be specified, rescind the aforesaid notification. " Pursuant to the powers conferred by section 4 of the Act, the Government of Maharashtra after consulting the Advisory Committee made the Private Security Guards (Regulation of Employment and Welfare) Scheme, 1981. Paragraph 11 of the Scheme requires the Board to maintain (1) a register of employers, and (2) a Pool Register which shall be a register of Security Guards. Paragraph 12 empowers the Board to arrange for the classification of Security Guards in suit able categories as may be determined by it from time to time. Paragraph 14 requires 'every employer who has engaged private Security Guards on the appointed day or at any time thereafter to 'get himself registered with the Board ' by applying in the prescribed form. The employer of an estab lishment coming into existence after the commencement of the Scheme is required to apply for registration simultaneously with the commencement of its business. Paragraph 15 requires 'any Security Guard who was working on the appointed day or at any time thereafter in the employment in the area to which the Scheme applies ' to 'apply to the Board ' in the prescribed form. Paragraph 25 provides that every registered Security Guard shall be deemed to have accepted 29 the obligation of the Scheme. A registered Security Guard in the pool who is available for work is required not to engage himself for employment under any registered employer unless he is allotted to that employer by the Secretary of the Board. A registered Security Guard in the pool who is avail able for work is further required to carry out directions of the Board and to accept employment under any registered employer for which he is considered suitable by the Board. Paragraph 26 provides that every registered employer shall accept the obligations of the Scheme. A registered employer is required not to employ a Security Guard other than a Security Guard who has been allotted to him by the Secre tary. A registered employer is however at liberty to employ Security Guard directly, A registered employer is required to disburse to the Security Guard the wages and other allow ances directly, if so directed by the Board and send to the Board a statement of such payment within the prescribed time. Paragraph 27 prohibits the employment by a registered employer of a Security Guard unless the Security Guard is a registered Security Guard or a directly employed Security Guard. Paragraph 29 makes detailed provision for wages, allowances and other conditions of service of Security Guards. Paragraph 30 provides for the disbursement of wages and other allowances to the Security Guards. Paragraph 31 provides for disciplinary procedure. Paragraph 32 prohibits the termination of employment of registered Security Guard except in accordance with the provisions of the Scheme. Paragraph 33 and paragraph 34 provide for appeals and termi nation. Paragraph 35 provides. for revision. Paragraph 37 provides for the cost of operating the Scheme and makes provision for amenities and benefits to the registered Security Guards. It is obvious from section 1(4) and the very definition of 'Security, Guard ' that the Act and, therefore, the Scheme are not applicable to persons who are direct and regular employees of a factory or establishment but are applicable only to persons working in any factory or establishment who are engaged or are to be engaged through an agency or agent and to persons who though not employed by the employer or agency or agent are working with their permission or under an agreement with them. Section 23, we have seen, provides for exemption from the operation of all or any of the provi sions of the Act or any scheme made thereunder of "all or any class or classes of Security Guards employed in any factory or establishment or in any class or classes of factories or establishments." The basic condition to be satisfied is that the State Government should be of the opinion that "all such Security Guards or such class or classes of Security Guards are in the enjoyment of benefits, which are on the whole not less 30 favourable to such Security Guards than the benefits provid ed by or under this Act or any Scheme made thereunder. "A close scrutiny of section 23, particularly in the light of section 1(4) read with the definition of 'Security Guard ', makes it clear that the exemption is not in respect of an agency or an agent or even a factory or establishment but in respect of all or any class or classes of Security Guards employed in any factory or establishment or in any class or classes of factories or establishments. In other words, the exemp tion is in regard to 'Security Guards ', employed in any factory or establishment or in any class or classes of factories or establishments. The exemption may be in respect of all the Security Guards employed in a factory or estab lishment or in a class or classes of factories or establish ments or in respect of a class or classes of Security Guards so employed. For example, all Security Guards employed in factory may be exempted or Security Guards of a particular grade or doing a particular type of work in factory may be exempted. Again all Security Guards employed in a class of factories, say textile mills may be exempted. All Security Guards in all textile mills doing a particular type of work or drawing a particular scale of pay may be exempted. The correlationship of the Security Guards or classes or Securi ty Guards who may be exempted from the operation of the Act is to the factory or establishment or class or classes of factories or establishments in which they work and not with the agency or agent through and by whom they are employed. This analysis has however no bearing on the question of locus standi of the persons who may seek the intervention of the State Government by the issue of notifications for exemption. Obviously the Security Guards or classes or Security Guards employed in a factory or establishment may apply to the Government to exempt them from the operation of the Act. Similarly Security Guards or classes of Security Guards employed in classes of factories or establishments may apply to the Government to exempt them from the opera tion of the Act. Again a factory or an establishment or a class or classes of factories or establishments may apply to the Government to exempt Security Guards employed in their factories or establishments from the operation of the Act. Though agencies or agents do not enter the picture directly, since the very definition of Security Guards means persons engaged or to be engaged through an agency or agent, it must follow that where Security Guards have been engaged or are to be engaged through them in any factory or establishment or a class of factories or establishments, such agency or agent may also apply to the Government, not to exempt all Security Guards engaged or to be engaged through them out to exempt Security Guards engaged or to be engaged in a factory or establishment or a class of factories or establishments. The question is 31 not one of locus standi at all but which or what class of Security Guards are to be exempted from the operation of the Act and the Scheme. Therefore, we are of the view that even an agency or agent may apply to the Government to grant exemption, but the exemption to be granted by the Government is not to be of any agency or agent but only of Security Guards employed in a factory or establishment or a class or classes of factories or establishments. One of the submissions of the learned counsel was that if section 23 was read in the light of section 22 it would follow that an agency could ask for exemption from the operation of the Act of all Security Guards employed through them. We do not see how that follows. All that section 22 provides in effect is that the rights or privileges of any registered Security Guard shall not be altered to his detriment. It only means that if hitherto as an employee of the agency, the terms and conditions of his services were more attractive on the whole than the terms and conditions of service offered by the Act and the scheme under the factory or establishment, the original terms and conditions of service will be preserved and become applicable to their service under the factory or establishment. It was submitted by the learned counsel that the Act and the Scheme did not provide for termination of the contract of employment between the agency and the Secu rity Guard or for the transfer of the services of the Secu rity Guards from the employment of the Agency to that.of the factory or establishment. We do not agree with the submis sion. By necessary implication, the services of the Security Guards will stand transferred to the service of the factory or establishment on allotment to it by the Board. It is in that fashion, among other things, that security of service is secured to the Security Guards. The High Court appeared to think that all the applica tions were rejected on the ground that a policy decision had been taken not to grant exemption in any case. The High Court relied on the affidavit of Shri Rajadhyaksha. It was stated in the affidavit of Shri Rajadhyaksha that the opin ion of the Advisory Committee was sought on the applications for exemption and the Advisory Committee recommended the applications of 21 applicants. Later the cases of four other applicants were recommended by the Labour Commissioner. After referring to these circumstances, Shri Rajadhyaksha stated in the affidavit. "I say that after the receipt of the recommen dations from the Advisory Committee by the Department of Industries, Energy and Labour, all the papers were submitted to the 32 Chief Minister through the Minister for Labour and the Minister of State for Labour to con sider whether to publish the notice of the Government 's intention to issue such notifica tion and invite objections and suggestions in respect thereto. I say that after considering all the pros and cons of the problem, the Hon 'ble the Chief Minister, in consultation with the Hon 'ble Minister for Labour and the Hon 'ble Minister of State for Labour took the decision that none of the agencies who had applied for exemption should be granted exemp tion under s.23 of the said Act because grant ing of such exemption will not be in the interest of the Security Guards employed with the agencies. " Later again Shri Rajadhyaksha stated; "I say that simply because the Advisory Com mittee had recommended the case for exemption, it was not obligatory on the State Government to publish a notice of its intention to issue notification for exemption as alleged therein. I say that it was for the Government to con sider the entire matter and to decide whether such a notification should be issued or not and if as a matter of policy and after going through the entire case the Government decided not to grant exemption no exception can be taken to the decision of the State Government. " We do not read the affidavit of Shri Rajadhyaksha to say that there was a predetermined policy decision pursuant to which all the applications for exemption were rejected without any consideration on merits. What the deponent of the affidavit meant to say was that the merits of each case were fully considered and the applications were rejected because it was their policy not to grant exemption if it was not in the interest of the Security Guards; A complaint was made that the Government did not state its reasons for rejecting the applications for exemption. We do not think that in cases of this nature where exemptions are sought from the operation of the Act, it is necessary for the Government to state its reasons. Of course, if there is a charge of mala fides or arbitrariness, the court may look into it to discover if there are any mala fides or if the refusal of the Government was arbitrary. We do not think that the orders refusing to grant exemptions in the present cases call for any interference on the sole ground of fail ure to state reasons. 33 In the result all the appeals are allowed and the writ petitions filed in the High Court are dismissed. Civil Writ Petition No. 12319 of 1985 filed by one of the agencies in this Court is also dismissed. The State of Maharashtra has also filed a special leave petition against the judgment of the Bombay High Court. It is disposed of on the same lines as the civil appeals. On behalf of some of the Security Guards a writ petition was filed in the Bombay High Court and it has been withdrawn to this Court to be disposed of along with the appeals. One of the contentions raised in the writ petition filed by the workmen is that the Scheme does not offer any continuity or guarantee of employment to those who are already working in factories or establishments having been engaged through agencies. We are assured by Shri K.K. Singhvi, learned counsel for the Board that every individual registered Security Guard who was previously working in a factory or establishment will be allotted to the same factory or estab lishment and if the total package of the terms and condi tions of his service were better than the terms and condi tions of service offered by the Board such person should be employed on the previous terms and conditions of service. The assurance of Shri Singhvi is made part of our order. The learned counsel for the workmen also urged that there was an insistence upon payment of 'capitation fee ' and sponsoring by a union before a Security Guard was registered under the Scheme. This, of course is not permissible under the Act or the Scheme and whoever has been so insisting will desist from doing so. P.S.S. Appeals allowed.

Section 1(4) of the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 makes the provisions of the Act applicable to security guards who were not direct and regular employees of the factory or the establishment. A 'security guard ' is defined in section 2(10) as a person who is engaged or is to be engaged through any agency or an agent to do security work. Section 3 empowers the State Government to make schemes to provide for the registration of employers and security guards and the terms and conditions of employment of registered security guards and their general welfare. Section 22 provides for preserva tion or ' existing rights and privileges of security guards if they are more favourable to them than those under the Act. Section 23 empowers the State Government to exempt security guards from the operation of the provisions of the Act or any scheme made thereunder. The Security Guards Board was constituted under section 6 of the Act and the Private Security Guards (Regulation or ' Employment and Welfare) Scheme, 1981 was also made to give effect to the Act. The respondents ' applications for exemption from the provisions of the Act having been rejected by the State Government they filed writ petitions before the High Court which were dismissed by a Single Judge. 20 On appeal, the Division Bench took the view that the applications had been rejected as a result of the policy decision not to grant exemption to any security agency and that this was wrong, that each application for exemption had to be considered on its own merits and so disposed of, and consequently directed the Government to consider the appli cations afresh. In these appeals, it was contended for the appellant Security Guards Board that section 23 of the Act did not contem plate the grant of exemption in favour of a security agency, on which ground alone the applications were liable to be rejected, and that the applications were rejected after consideration on merits and not on the basis of any policy decision. For the respondents it was argued that if section 23 was read in the light of section 22 it would follow that an agency could ask for exemption from the operation of the Act, that wherever the conditions of service were better than those proposed under the scheme the Government was under a duty to grant exemption, and that the Act did not contemplate the abolition of the agency system as such or termination of the contract of employment between the agency and the security guards, or for the transfer of the services of the security guards from the employment of the agency to that of the factory or establishment. Allowing the appeals, the Court, HELD: 1. The orders of the State Government refusing to grant exemption to the respondents from the operation or ' the provisions of the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 do not call for any interference. [32GH] 2. Section 23 of the Act read with section 1(4) and the definition of 'security guard ' in section 2(10) makes it apparent that the exemption is in regard to security guards employed in any factory or establishment or in any class or classes of factories or establishments and not in respect of an agency or an agent. All security guards employed in a facto ry may be exempted or security guards of a particular grade or doing a particular type of work in the factory may be exempted. Again, all security guards employed in a class of factories, say textile mills, may be exempted. All security guards in textile mills doing a particular type of work or drawing a particular scale of pay may be exempted. The correlationship of the security guards or classes of securi ty guards who may be exempted from the operation of the Act is to the factory or establishment or class or classes of factories or establishments in which they work and not to the agency or agent through and by whom they are employed. [30A D] 21 3. The question is not one of locus standi at all but which or what class of security guards are to be exempted from the operation of the Act and the scheme. The security guards or classes of security guards employed in a factory or establishment or in a class or classes of factories or establishments may apply to the Government to exempt them from the operation of the Act. Similarly a factory or an establishment or a class or classes of factories or estab lishments may apply to the Government to exempt security guards employed in their factories or establishments from the operation of the Act. Where security guards have been engaged or are to be engaged through an agency or agent in any factory or establishment or a class of factories or establishments, such an agency Or agent may also apply to the Government, not t9 exempt all security guards engaged or to be engaged through them but to exempt security guards engaged or to be engaged in a factory or establishment or a class of factories or establishments. The exemption to be granted by the Government is not to be of any agency or agent but only of security guards employed in a factory or establishment or a class or classes of factories or estab lishments. [30H 31 A; 30E; G; 31 AB] 4. Even if section 23 is read in the light of section 22 it does not follow that any agency can ask for exemption from the operation of the Act of all security guards employed through them. All that section 22 provides in effect is that the rights or privileges of any registered security guard shall not be altered to his detriment, which only means that if hitherto as an employee of the agency the terms and conditions of his service were more attractive on the whole than the terms and conditions of service offered by the Act and the scheme under the factory or establishment, the original terms and conditions of service will be preserved and become applica ble to their service under the factory or establishment. [31B D] 5. The Act and the scheme provide for termination of the contract of employment between the agency and the security guards, and by necessary implication the services of the security guards will stand transferred to the service of the factory or establishment on allotment to it by the Board. It is in that fashion, among other things, that security of service is secured to the security guards. [31 DE] 6. In cases of this nature where exemptions are sought from the operation of the Act, it is not necessary for the Government to state its reasons. Of course if there is a charge of mala fides or arbitrariness. the Court may look into the matter to discover if there were any mala fides or if the refusal of the Government was arbitrary. In the instant case. there was none. [32GH] 22 7. The merits of each case were fully considered by the Government and the applications were rejected because it was their policy not to grant exemption if it was not in the interest of the security guards. There was no predeter mined policy decision as such. [32F] 8. Every individual registered security guard who was previously working in a factory or establishment will be allotted to the same factory or establishment and if the total package of the terms and conditions of his service were better than the terms and conditions of service offered by the Board such person would be employed on the previous terms and conditions of service. [33CD] 9. Charging of 'capitation fee ' by a union before spon soring a security guard tot registration under the scheme is not permissible under the Act or the scheme.

s the event of redemption happened. The doc trine of id certum est quod certum reddi potest is clearly applicable to the case. [290D E] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4754 of 1989. From the Judgment and Order dated 17.5.1989 of the Rajasthan High Court in S.B. Civil Revision Petition No 450 of 1988. V.M. Tarkunde, B.L. Kachhawan and Badridas Sharma for the Appelant. Aruneshwar Gupta and section Kumar for the Respondent. The Judgment of the Court was delivered by SHARMA, J. Special leave is granted. This appeal arises out of a suit filed by the re spondent against her brother, the appellant, for specific performance of an alleged contract of sale dated 23.6.1965 in respect of a house. The property was under a mortgage and according to the plaintiff 's case, the defendant had agreed to execute a deed of sale on the redemption of the mort 289 gage by her, which she did in 1970. In spite of her repeated demands the defendant failed to respect the agreement which necessitated the institution of the suit. The defendant appellant, besides pleading limitation, denied the agreement as also the plaintiff 's allegation that she had redeemed the mortgage. The question of limitation was taken up by the trial court as a preliminary issue and decided in favour of the plaintiff. The order has been confirmed by the High Court by the impugned judgment. The plaintiff served a notice in July 1984 demanding specific performance before filing the suit. It has been contended on behalf of the appellant that since the alleged agreement is said to have been executed in June 1965, the suit is barred by limitation, and alternatively, even count ing the period of limitation from the alleged redemption in 1970, the suit has been filed after more than 14 years, that is, long after the expiry of three years ' period prescribed under Article 54 of the of 1963. The High Court has rejected the argument holding that since the cause of action of the suit was dependent on the redemption of the mortgage and no period was fixed within which it was neces sary for the respondent to have redeemed the mortgage, it cannot be said that a date was 'fixed ' within the meaning of the third column of Article 54, which reads thus: Description period of Time from which of suit limitation period begins to run "54. For specific three years The date fixed for the per performance. formance, or, if no such date is fixed, when the plaintiff has notice that performance is refused. " As the notice preceding the suit was admittedly served within three years, the defendant 's plea of limitation was rejected. The relevant provisions in the alleged agreement of sale as quoted in the judgment of the trial court reads as follows: 290 "This house is under mortgage with Jethmal Bastimal for Rs. 1000. When you will get this house, the description of which is given below, redeemed from M/s Jeth Mat Bastimal and take the papers of the registry in your pos session, on that day I will have the sale deed of the said house, written, executed and registered in your favour." (emphasis supplied The question is whether a date was 'fixed ' for the perform ance of the agreement and in our view the answer is in the affirmative. It is true that a particular date from the calander was not mentioned in the document and the date was not ascertainable originally, but as soon as the plaintiff redeemed the mortgage, it became an ascertained date. If the plaintiff had, immediately after the redemption, flied the suit, could it be thrown out on the ground that she was not entitled to the specific performance asked for? We do not think so. She would have been within her rights to assert that she had performed her part of the contract and was entitled to insist that her brother should complete his part. The agreement is a typical illustration of a contin gent contract within the meaning of section 31 of the and became enforceable as soon as the event of redemption (by the plaintiff hereself) happened. We agree with the view of the Madras High Court in R. Muniswami Goundar and Another vs B.M. Shamanna Gouda and Others, expressed in slightly different circum stances. The doctrine of id certurn est quod certum reddi potest is clearly applicable to the case before us which in the language of Herbert Broom (in his book dealing with legal maxims) is that certainty need not be ascertained at the time; for if, in the fluxion of time, a day will arrive which will make it certain, that is sufficient. A similar question had arisen in Duncombe vs The Brighton Club and Norfolk Hotel Company, , relied upon in the Madras case. Under an agreement, the plaintiff had supplied some furniture to the defendant for which payment was made but after .some delay. He claimed interest. The rule at Common Law did not allow interest in such a case, and the plaintiff in support of his claim relied upon a statutory provision which could come to his aid only if the price was payable at a certain time. Blackburn, J. observed that he did not have the slightest hasitation in saying that the agreement contemplated a particular day, which, when the goods were delivered would be ascertained, and then the money would be payable at a certain time; but rejected the plaintiff 's demand on the ground that the price did not become payable by the written instrument at a certain time. The other learned Judges did not agree with him, and held that the statute did 291 not require that the document should specify the time of payment by mentioning the day of payment. If it specified the event upon which the payment was to be made, and if the time of event was capable of being ascertained, the require ments of the section were satisfied. The same is the posi tion in the case before us. The requirement of Article 54 is not that the actual day should necessarily be ascertained upon the face of the deed, but that the basis of the calcu lation which was to make it certain should be found therein. We, accordingly, hold that under the agreement the date for the defendant to execute the sale deed was fixed, although not by mentioning a certain date but by a reference to the happening of a certain event, namely, the redemption of the mortgage; and, immediately after the redemption by the plaintiff, the defendant became liable to execute the sale deed which the plaintiff was entitled to enforce. The period of limitation thus started running on that date. The case is, therefore, covered by the first part of Article 54 (third column) and not the second part. The learned counsel for the respondent relied on several decisions in support of the opinion of the High Court in the impugned judgment but they do not appear to help him. In Sathula Venkanna vs Namuduri Venkatakrishnayya and Another, , it was observed that in cases where a right to enforce specific performance vests in a third party to whom the ascertainment of the date on which performance becomes due need not necessarily be known, the doctrine certum est quod certum reddi potest does not apply. Without expressing their final opinion the learned Judges observed that it might be right to apply the doctrine be tween the actual parties to the contract who would get the benefit and be subject to the liabilities under that con tract; "but in cases where a person is entitled to bring a suit on the contract who may not and need not, and very likely may not be aware of the date becoming fixed", the doctrine could not apply. In Kruttiventi Mallikharjuna Rao vs Vemuri Pardhasaradhirao, AIR 1944 Madras 2 18, the vendor promised to execute the sale deed when both of his brothers, who were studying elsewhere, returned to the village. It was held that it was not a case where it could be said that a date was fixed for the performance of the contract as the event mentioned therein was too indefinite to be regarded as fixing a date. The performance was dependant on both the brothers of the vendor coming to the village, in which the intending purchaser had no say at all. Apart from the ques tion of limitation, the defendant could not effectively rely upon such a clause to defeat the very contract. In Kashi Prasad vs Chhabi Lal and Others, AIR 1933 Allahabad 410(2), the plaintiff created two usufructuary mortgages and there after a third mortgage in 292 favour of the defendants for a sum of Rs.8,500. Out of this sum an amount of Rs.6,000 was left with the mortgagees for payment to the earlier creditors. The suit was instituted on the allegation that the defendants had failed to redeem the earlier mortgages. The plaintiff prayed for a direction to the defendants to redeem the mortgages. The document did not indicate as to the time when the defendants were obliged to redeem the earlier mortgages, and a plea of limitation was taken on the ground that the date was fixed by necessary implication and could be ascertained by reference to the surrounding circumstances. In this background the court observed that the use of the word 'fixed ' implies that it should be fixed definitely and should not be left to be gathered from surrounding circumstances of the case. All these cases are clearly distinguishable. For the reasons mentioned above, the impugned judg ments of the High Court and the trial court are set aside and the suit is dismissed. The appeal is accordingly al lowed, but the parties are directed to bear their own costs throughout. P.S.S. Appeal allowed.

The period of limitation of three years for specific performance of a contract begins to run under the third column of Article 54 of the from the date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused. Under an agreement dated June 23, 1965 the plaintiff respondent, sister of the defendant appellant, undertook to redeem the disputed property under mortgage and the appel lant agreed to execute the sale deed of the said property in her favour on the date she took papers of the registry in her possession. She redeemed the property in 1970. The appellant, however, failed to respect the agreement in spite of repeated demands. The respondent served a notice in July 1984 demanding specific performance before filing the suit. The appellant pleaded limitation. The trial court decided the issue in favour of the respondent. That order was confirmed by the High Court on the view that since the cause of action of the suit was dependent on the redemption of the mortgage and no period was fixed within which it was necessary for the respondent to have redeemed the mortgage, it could not be said that a date was ' 'fixed" within the meaning of the third column of Article 54. Allowing the appeal by special leave, HELD: 1.1 The requirement of Article 54 of the Limita tion Act, 1963 is not that the actual day should necessarily be ascertained upon the face of the deed, but that the basis of the calculation which was to make it certain should be found therein. [291A B] 1.2 In the instant case, under the agreement the date for the appellant to execute the sale deed was fixed, al though not by mentioning 288 a certain date but by a reference to the happening of a certain event, namely, the redemption of the mortgage; and, immediately after the redemption by the respondent, the appellant became liable to execute the sale deed which the respondent was entitled to enforce. The period of limitation thus started running on that date. The case, is, therefore, covered by the first part of Article 54 (third column) and not the second part. [291B C] R. Muniswami Goundar & Anr. B.M. Shamanna Gouda & Ors., and Duncombe vs The Brighton Club Sathula Venkanna vs Namuduri Venkatakrishnayya & Anr., ; Kruttiventi Mallikharjuna Rao vs Vemuri Pardhasaradhirao, AIR 1944 Madras 218 and Kashi Prasad vs Chhabi Lal & Ors '., AIR 1933 Allahabad 410 (2) distin guished 2. The agreement in the instant case is a typical illustration of a contingent contract within the meaning of section 31 of the

vil Appeal Nos. 2665 72 (NT) of 1981 etc. From the Judgment and Order dated 9.1.1980 of the Madras High Court in Tax Case Nos. 894, 895 of 1977, 591, 942,968, 975 of 1979 and W.P. Nos. 4951 and 4952 of 1978. section Padmanabhan, R. Mohan and R.A. Perumal for the Appel lant. T.A. Ramachandran, A.K. Sen, Mrs. J. Ramachandran, Inbarajan, P.N. Ramalingam, A.T.M. Sampath and A.V.V. Nair for the Respondents. The Judgment of the Court was delivered by RANGANATHAN, J. All these civil appeals and special leave petitions raise a common question as to the interpre tation of an expression used in the . Some of these matters arise out of judgments of the High Court in Tax Revision cases and some out of judgments in writ petitions but the point involved is the same. 1n view of the pendency of the appeals, we grant leave in the spe cial leave petitions after condoning the delay in filing some of them and proceed to dispose of all the appeals by a common order. The respondents are all dealers in hides and skins carrying on business in the State of Tamil Nadu. As is well known, raw hides and skins undergo various processes such as cutting, tanning, dyeing, dressing and finishing before they get converted into finished leather and assume a condition fit for the manufacture of various kinds of leather arti cles. The dispute in these appeals is in regard to two items of goods that are sold by these assessees viz. leather splits and coloured leather. The splits are the cut pieces, often small and irregular, obtained in the process of cut ting raw of tanned hides and skins either with a view to reduce their thickness or with a view to give them a regular shape. Coloured leather is obtained when the tanned hides and skins are dyed with various colours. The assessee, inter alia, deal in these two items, their manner of such dealing varying from case to case. Some of them obtain the leather splits in the process of cutting and sell them while 449 some purchase the cuttings and sell them as such. So also, the coloured leather is obtained by some of the assessees in the process of finishing and they sell them while others purchase the coloured leather and sell them as such. The assessees ' claim is that these two items fall in the list of "goods of special importance in inter State trade and com merce" set out in section 14 of the (the 'CST Act ') and that, therefore, the assessee is enti tled, in respect of their sales, to the concessions avail able under section 15 of the CST Act viz. the benefits of single point taxation and of a smaller rate of tax. The sole ques tion in these appeals is whether the High Court was right in upholding this claim. The principal judgment of the High Court on this point has been reported as Mahi Traders vs State of Tamil Nadu, [1980] 45 S.T.C. 327. The relevant entry in section 14 of the CST Act reads: "14(1)(iii) hides and skins, whether in a raw or dressed state. " The short case of the department is: (a) that leather splits or cuttings are "scrap" and do not qualify any longer to be described as hides and skins; and (b) that coloured leather is a totally new and sophisticated product known as leather and can no longer be described merely as hides and skins. The department 's case is best explained in a passage from the order of the Board of Revenue which accepted the depart ment 's contention. It observed: "The contentions have been examined with reference to the connected records. The splits are only pieces of leather obtained in the process of getting leather of uniform thick ness from dressed skins. Such splits cannot be treated as dressed hides and declared goods. The expression "raw or dressed skin" in sec tion 14 of the has a distinct connotation and it cannot be extended to leather bits obtained in a process. These splits are of much lesser value and cannot be equated to dressed skins. In 27 S.T.C. page 385 the Orissa High Court has held that if steel plates are cut to sizes, they cease to be the original product. What should be con sidered is whether those leather splits are commercially understood as dressed hides and skins. If they are understood only as just skins as claimed, there is no need to call them as splits in commercial parlance. The Courts have repeatedly ruled that the entries in the Act 450 should be treated only as understood by the Trade. These splits were produced before the Board at the time of hearing. They were found to be thin pieces which can be utilised only for miscellaneous purposes. The contention that these leather splits continue to be dressed skins and are declared goods of inter state importance, is untenable. The assessing officer was therefore right in treating these splits as scraps and taxing them at the multi point rate, and in the absence of 'C ' forms, at 10%. As regards the coloured skins, once the dressed skins bought are split and the upper layer of uniform size is coloured or dyed, such coloured skins become different products. They are finished leather sold as coloured skins and not as dressed skins. They are commercially different, and are treated and dealt with in trade circles as different products. The process of dyeing or colouring changes the commercial nature of the dressed skins. There are different patterns of dyeing and colouring. The complete piece may be dyed or coloured uniformly with a single colour or with a pattern of colours, depending upon the requirements of the prospective consumers in the market. As the dressed skins are subjected to process, first by splitting and secondly by colouring they become different products. Pieces of coloured and dyed leather were produced before the Board at the time of hearing. Some pieces were coloured With a single colour on one side and dyed on the reverse. They can be used straightaway for manufacturing leather goods. They were also in patterns. The contention that no change is involved has therefore no force. Both the Appellate Assistant Commissioner and the Assessing Officer were not therefore correct in allowing exemption. " On the other hand, on behalf of the assessees, refer ence is made to certain circulars of the authorities which contain a contemporaneous exposition of the meaning of the entry in question, reliance is placed on the decision of the Sales Tax Appellate Tribunal to the contrary and it is emphasised that, to say that the one item is called scraps and the other is called leather is not sufficient to take them out of the description "hides and skins, in a raw or dressed state". It is submitted that cuttings of hides and skins do not cease to be hides and skins merely because they are small pieces and can be loosely described as "scraps". So far as coloured leather is concerned, according 451 to the assessee, the question is not whether the coloured skin is described as leather or whether it is a new product different from hides and skins, as understood generally, but what exactly is the scope of the expression used in entry (iii) of section 14(1). The submission is that hides and skins are generally described as leather even as soon as tanning is done but the entry in the statute goes much beyond this stage. It takes in all categories of hides and skins right from their raw condition, through various stages of their tanning and other processing, right upto the stage when they receive the final finishing touches. We have heard learned counsel on both sides at length and come to the conclusion that the assessees are entitled to the benefit of Ss. 14 and 15 of the CST Act in respect of the two items in question. As far as the first item is concerned, it is common ground that leather splits are nothing but cut pieces of hides and skins. We fail to see how they cease to be hides and skins. It is no doubt true that they are cheaper and have a separate name but the name only indicates that they are cut pieces. It is not because they have ceased to be hides and skins and constitute a different commercial commodity that they are called 'scraps '. Some of the dealers purchase and sell such splits and such turnover is considerable. There is no material to suggest that they are useless or worthless articles. A loose description of them as 'scrap ' cannot deprive them of the benefit of section 14 of the Act. Turning to coloured leather, we may, at the outset, refer to a very important circumstances referred to by the respondents. When the CST Act came into force on 1.4.1957, a question was raised regarding the meaning of the expression 'hides and skins in dressed state ' used in section 14. The matter was referred to the leather development wing of the Ministry of Commerce and Industry which gave the following opinion: "Hides and Skins are obtained from either slaughtered or dead animals. The raw hides and skins thus obtained are known to be in the Green State. These are easily putrescible; if proper precautions are not taken they would easily rot and decay. Since tanneries are not always located very near the source of raw hides and skins, the question of preserving them for a temporary period till they reach a tanning centre assumes importance. Raw hides and skins are 'cured ' by either wet salting, dry salting or drying. In the 'cured state ' the raw materials can be preserved for a temporary period. In the third state of tempo rary preserva 452 tion, the hides and skins are 'picked '. During the next stage they are tanned in which state they can be preserved almost indefinitely. These tanned hides and skins are processed further to yield Dressed Hides and Skins which are ready for use. 'Dressed ' or finished material could also be preserved almost indef initely. From the above, it will be seen that the expression 'Hides and Skins in the raw or dressed State ' refers at one end to the raw material obtained from the slaughtered or dead animals and at the other end to the tanned and finished material; the expression, therefore, seems to include the other intermediate stages indicated in the previous paragraphs. Dress ing, according to the authoritative interpre tations, would mean the conversion of tanned hides and skins by further suitable processing into leathers of different types which are ready for use" (vide SBT/ . 18(495/14) of November 11, 1957). It would seem though this is not quite clear from the record, that this opinion held the field for quite some time until the assessments presently in question were made. Even here, as pointed out by the High Court, the departmental view was not quite consistent. The Deputy Commercial Tax Officer, in some of the cases, was willing to concede that coloured leather, notwithstanding the colouring, continued to be dressed hides and skins but thought that leather splits should be brought to multipoint tax. The Assistant Commissioner, on the contrary, took the view that splits would continue to be hides and skins. It was the Board of Revenue that decided that both items would fall outside the purview of item (iii) in section 14(1). It has been pointed out by this court in Desh Bandhu Gupta and Ors. vs Delhi Stock Exchange, ; , and Varghese vs ITO, that a contemporane ous exposition by the administrative authorities is a very useful and relevant guide to the interpretation of the expressions ' used in a statute. Considering that the above clarification was sought for at the earliest point of time when a doubt arose as to the scope of the expression used by the statute and given after considering the technicalities of the processes employed in the manufacture of finished leather by the department fully conversant with this branch of trade and in the context of the provisions of this very statute, the terms of the statute can well be construed by reference to such exposition, in the absence of anything in the statute 453 to indicate the contrary. Indeed, "such interpretation should be shown to be clearly wrong before it is overturned. " Can it then be said that the view expressed above is clearly wrong? We think not; on the contrary, it is seen to be quite correct. The statutory expression refers to "hides and skins in a dressed state". The guidelines issued for identification of 'finished ' leather for exports by the Indian Standards Institution (ISI) refer to as many as 19 operations or processes undergone during manufacture of 'finished leather ' but 'dressing ' is not one of them. A glossary of terms relating to hides, skins and leather published by the I.S.I. in 1960 contains the following definitions: CRUSTS: (Crust Leather) Tanned hides and skins without any finish. CURRYING: A series of dressing and finishing processes applied to leather after tanning in the course of which appropriate amounts of oils and greases are incorporated in the leather to give it increased tensile strength, flexibility and resisting properties. DRESSED RIDES: Tanned hides, curried or other wise finished, for various purposes, such as belting, harness and saddlery, travel goods and for upholstery. DRESSING LEATHER: Vegetable tanned hides which may be dressed to suit the purpose for which they are to be used, such as for harness, saddlery and other mechanical purposes. LEATHER: The skin or hide of animals prepared by tanning, which still retains its original fibrous structure more or less intact, but from which hair or wool may or may not have been removed and which has been treated so as to be imputrescible even after treatment with water. The earlier glossary of such terms published by the British Standards Institution defines 'dressing ' as a "general term for the series of processes employed to con vert certain rough tanned hides and skins and/or crust leather into leather ready for use. " Also, "Leather" is defined as "a general term for hide or skin which still retains its original fibrous structure more or less intact, and which has 454 been treated so as to be imputrescible even after treatment with water. " The hair or wool may or may not have been removed. Certain skins, similarly treated or dressed, and without the hair removed, are termed 'fur '. The Dictionary of Leather Terminology published by the Tanners ' Council of America, describes leather as "the hide and skin of any animal or any portion of such skin, when tanned, tawed or otherwise dressed for use. " The above definitions show that hides and skins acquire the name of 'leather ', even if the hair or wool has not been removed therefrom, as soon as they receive some treatment which prevents them from putrefaction after treatment with water. Dressing is a stage much later than tanning. Indeed, from the definitions quoted above, it will be seen that it is practically the same as giving finishing touches to the leather and making it suitable for the manufacture of par ticular types of goods. Sri Sen invited our attention, apart from the contempo raneous exposition by the Department, to the findings of the Tribunal in this regard in an earlier case which had not been appealed against by the Department. The Tribunal had said: "We have carefully considered the records as well as the arguments. We have seen the speci mens of the articles sold. Bits of the same are also on record. We have carefully scruti nised the same. We are unable to say that what the appellants had sold is not leather or in other words dressed hides and skins. The fact that the appellant has done some more finish ing would not take away the resultant product from the classification. We do find that the clarification issued by the Board of Revenue, Madras and the Govt. of India supports the appellants case. The expert opinion which only says that the resultant product has undergone some chemical changes observed as under: It is, surely a different product, because it is a finished leather. It however, retains the leathery properties of the dressed leather. Hence the expert opinion also fully supports the appellants case inasmuch as it concedes that the resultant product is 'finished leath er '. It is because the issue in appellant 's case is not whether the appellant was selling a different product 455 from the one it purchased, but whether the appellant was selling tanned leather. In this case, we do not find any factual basis even to cast any doubt upon the appellant 's claim. It is a pity that the assessing authority should have followed the audit objections without the application of his own mind. Leather from the stage of raw skins to the stage of dressed hides and skins may undergo various stages of changes. Under the classification for the purposes of section 14 of the , the various stages are irrelevant. For the purposes of Tamil Nadu General Sales Tax Act, 1959, only two stages that are rele vant are the skins at the raw stage and the skins in the form of dressed hides and skins (or tanned hides and skins). The appellant purchases semifinished leather and undertakes further process of finishing with a view to colour the hides and skins for certain uses of skins. He says that he purchased the same tanned hides and skins and sold the tanned hides and skins. According to him the products purchased and sold are not different even under the classification by way of the dichot omy between raw and dressed hides and skins under the Tamil Nadu General Sales Tax Act. Under the , the appellant is in a much better position, because all the hides and skins are brought together in one entry. Whether raw or dressed, the product falls under the same entry. " We are of opinion that this represents the correct view of the scope of the entry in question. The same conclusion is further borne but by the litera ture referred to before us by Sri Ramachandran. 7 of the Encyclopedia Brittanica, under the word "dress", ex plains that the verb has various applications which can be deduced from its original meaning and that "it is thus used not only of the putting on of the clothing but of the pre paring and finishing of leather . . "Vol. 17, under the head "leather" details the various processes applied in the treatment of hides and skins at all stages, pre tanning, tanning and post tanning. Dyeing or colouring is a process which follows tanning but precedes "finishing" (i.e. dress ing) in order to make it suitable for the purpose for which it is required in commercial usage. of the "Wealth of India", a publication of the Council of Scientific and Industrial Research (1966), dealing with leather under "Industrial Products" explains that "hides and skins are liable to putrefaction and loss unless 456 suitably treated and converted into leather. " Structurally, hides and skins have a thick middle layer called corium, which is converted to leather by tanning. The operations involved in leather manufacture however fall into three groups. Pre tanning operations include soaking, liming, deliming, bating and pickling, and post tanning operations are splitting and shaving, neutralising, bleaching, dyeing, fat liquoring and stuffing, setting out, samming, drying, staking and finishing. These operations bring about chemical changes in the leather substance and influence the physical characteristics of the leather, and different varieties of commercial leather are obtained by suitably adjusting the manufacturing operations. These processes need not be gone into in detail but the passages relied upon clearly show that hides and skins are termed 'leather ' even as soon as the process of tanning is over and the danger of their putrefaction is put an end to. The entry in the CST Act, however, includes within its scope hides and skins until they are 'dressed '. This, as we have seen, represents the stage when they undergo the process of finishing and assume a form in which they can be readily utilised for manufacture of various commercial articles. In this view, it is hardly material that coloured leather may be a form of leather or may even be said to represent a different commercial commod ity. The statutory entry is comprehensive enough to include the products emerging from hides and skins until the process of dressing or finishing is done. We are, therefore, of the view that the High Court was right in holding that 'splits ' and 'coloured leather ' con tinue to be hides and skins eligible for special treatment under the CST Act. All the appeals, therefore, fail and are dismissed. We however make no order as to costs. G.N. Appeals dis missed.

The respondents are dealers in hides and skins. They deal among other things in splits and coloured leather. The splits are the cut pieces, small and irregular, obtained in the process of cutting raw or tanned hides and skins either with a view to reduce their thickness or to give them a regular shape. Coloured leather is obtained when the tanned hides and skins are dyed with various colours. The claim of the respondents is that these two items fail in the list of "goods of special importance in inter State trade and com merce" set out in section 14 of the and, therefore, entitled to the concessions available under section 15 of the Act, namely the benefits of single point taxation and of a smaller rate of tax. Such claims were allowed by the assessing authority in respect of coloured leather and in respect of splits he disallowed the claims. The Appellate Assistant Commissioner upheld the order of the assessing authority. The Board of Revenue negativated the contention that leather splits continued to be dressed skins under declared goods of inter State importance and held that these splits are to be treated as 'scraps ' or to be taxed at the multiple rates. As regards coloured leather the Board held that these are commercially different products and that the exemption granted was not correct. The tribunal, in certain cases, had held that the assessee was entitled to the con cessions claimed in respect of both items. The respondents moved the High Court by way of Writ Peti tions 446 and tax revision cases and the High Court upheld the claim of the respondents, holding that 'splits ' and 'coloured leather ' continue to be hides and skins eligible for special treatment under the . The present appeals by special leave are against those judgments of the High Court. The contentions of the appellant State were that the leather splits or cuttings are "scrap" and do not qualify any longer to be described merely as hides and skins and that coloured leather is a totally new and sophisticated product known as leather and can no longer be described merely as hides and skins and as such cannot qualify for exemption. On behalf of the respondents, a reference was made to certain circulars of the authorities which contain a contem poraneous exposition of the meaning of the entry in question and contended that, to say that one item being called scraps and the other as leather would not be sufficient to take them out of the description "hides and skins, in a raw or dressed state" and cuttings of hides and skins would not cease to be hides and skins merely because they are small pieces and can be loosely described as "scraps". As for coloured leather, it was contended that the exact scope of the expression used in entry (iii) of section 14(1) which re ferred to 'hides and skins whether in a raw or dressed state ' would have to be looked into. Dismissing the appeals, HELD: 1.1. The High Court was right in holding that 'splits ' and 'coloured leather ' continue to be hides and skins eligible for special treatment under the . [456E] 1.2 A contemporaneous exposition by the administrative authorities is a very useful and relevant guide to the interpretation of the expressions used in a statute. Consid ering that the clarification was sought for from the Minis try of Commerce at the earliest point of time when a doubt arose as to the scope of the expression used by the statute and given after considering the technicalities of the proc esses employed in the manufacture of finished leather by the department fully conversant with this branch of trade and in the context of the provisions of this very statute, the terms of the statute can well be construed by reference to such exposition, in the absence of anything in the statute to indicate the contrary. Indeed, such interpretation should be shown to 447 be clearly wrong before it is overturned. The view of the Ministry was that the expression 'hides and skins in the raw or dressed State ' refers at one end to the raw material obtained from the slaughtered or dead animals and at the other end to the tanned and finished material; the expres sion, therefore, seems to include the other intermediate stages as well. 'Dressing ' according to the authoritative interpretations, would mean the conversion of tanned hides and skins by further suitable processing into leathers of different types which are ready for use. [452F H; 452B D] Desh Bandhu Gupta and Ors. vs Delhi Stock Exchange, ; ; Verghese vs I.T.O., , relied on. Mahi Traders vs State of Tamil Nadu, [1980] 45 STC 327, approved. Definitions in this regard show that hides and skins acquire the name of 'leather ' even if the hair or wool has not been removed therefrom, as soon as they receive some treatment which prevents them from putrefaction after treat ment with water. 'Dressing ' is a stage much later than tanning. Indeed, from the definitions it is clear that it is practically the same as giving finishing touches to the leather and making it suitable for the manufacture of par ticular types of goods. The findings of the Tribunal in this regard in an earlier case, which had not been appealed against by the Department, that under the , the appellant is in a much better position, because all the hides and skins are brought together in one entry, and whether raw or dressed, the product falls under the same entry, seems to be the correct view of the scope of the entry in question. [454B D; 455E] Glossary of terms relating to hides, skins and leather published by ISI in 1960: Dictionary of Leather Terminology published by the Tanners ' Council of America. Encyclopedia Britannica Vol. 7 and, 'Wealth of India '. , a publica tion of the Council of Scientific and Industrial Research, 1966, relied on. Hides and skins are termed 'leather ' even as soon as the process of tanning is over and the danger of their putrefaction is put an end to. The entry in the , however, includes within its scope hides and skins until they are 'dressed '. This represents the stage when they undergo the process of finishing and assume a form in which they can be readily utilised for manufacture of various commercial articles. In this view, it is hardly material that coloured leather may be a form of leather or may even be said to represent a different commer 448 cial commodity. The statutory entry is comprehensive enough to include the products emerging from hides and skins until the process of dressing or finishing is done. [456C E]

(Civil) No. 587 of 1986 Under Article 32 of the Constitution of India. C.S. Vaidyanathan, M.K.S. Menon and S.R. Bhatt for the Petitioner. G. Ramaswamy, Additional Solicitor General, Miss Sushma Relan and R.D. Agarwala for the Respondent. Frank Anthony, Sushil Kumar and S.P. Mitra for Respond ent No. 3. The Judgment of the Court was delivered by 244 CHINNAPPA REDDY, J. The scales of pay and other condi tions of service of teachers and other employees of the Frank Anthony Public School New Delhi compare very unfavour ably with those of their counterparts of the Delhi Adminis tration Schools. The scales of pay of teachers, primary, T.G.T. or middle, and senior or P.G.T. of Government schools (that is, schools run by the Delhi Administration), as of today, are 1200 30 1560 EB 40 2000, 1400 40 1600 50 2300 EB 60 2600 and 1640 60 2600 EB 75 2900 respectively. Primary and middle school teachers are enti tled to House Rent Allowance of Rs.250. City Compensatory Allowance of Rs.75 and Medical Allowance of Rs.25 while, Senior school teachers are entitled to House Rent Allowance of Rs.450, City Compensatory Allowance of Rs.100 and Medical Allowance of Rs.25. At the starting point a primary school teacher gets a total sum of Rs.1540 per month by way of salary and allowances, a middle school teacher gets a total sum of Rs.1750 and a senior school teacher a total sum of Rs.2215. The scales of pay of primary, middle and senior school teachers of the Frank Anthony Public School are 275 20 475 25 600 25 725,300 25 550 30 770 30 850 and 400 30 700 35 875 35 1050. They get allowances of Rs.702.50, 715 and 765 respectively. At the starting point the salary and allowances together come to Rs.977.50, 1015 and 1165 respectively. In the case of teachers of Government schools they are entitled to gratuity of 15 days ' pay for every year of service, Provident Fund at the rate of 8.33% and Leave Travel Concession once every two years to their home town. In the case of 'teachers of the Frank Anthony Public School there is provision for Contributory Provident Fund and Family Pension only. Teachers of Government schools are entitled to Casual Leave of 12 days, Earned Leave of 10 says, Sick Leave of 10 days and Maternity Leave of 90 days, whereas, teachers of the Frank Anthony Public School are entitled to Casual Leave of 10 days, no Earned Leave, Sick Leave of 14 days and Maternity Leave of 30 days. In the case of Class IV employees, in Government schools, the scale of pay is 750 8 790 EB 10 940 with House Rent Allowance of Rs.150, City Compensatory Allowance of Rs.30 and Medical Allowance of Rs.25. The scale of pay of Class IV employees of the Frank Anthony Public School is 70 5 120 7.50 195 with allowances of Rs.473. The total starting salary and allow ances of Class IV employees in Government Schools and the Frank Anthony Public School are Rs.955 and Rs.543 respec tively. It is evident that in the matter of emoluments and conditions of service such as leave etc. teachers and em ployees of the Frank Anthony Public School lag far behind the teachers and employees of Government schools. There are other conditions of service of teachers and employees of the Frank Anthony Public School which also com 245 pare unfavourably with the conditions of service of teachers and employees of Government Schools. The Frank Anthony Public School employees Association seeks equalisation of their pay scales and conditions of service with those of teachers and employees of Government Schools. Sections 8 to 12 of the Delhi School Education Act together comprise Chapter IV of that Act which deals with "Terms and condi tions of service of employees of recognised private Schools. " If Sections 8 to 11 were applicable to the teach ers and other employees of the Frank Anthony Public School, they would at least be as well off as teachers and other employees of Government Schools. But section 12 provides, "Nothing contained in this Chapter shall apply to an unaided minority school. " The Frank Anthony Public School is an unaided minority school. By the force of Section 12 of the Act, the provisions of Sections 8 to 11 do not apply to the Frank Anthony Public School. Therefore, the Frank Anthony Public School Employees Association has sought from this Court a declaration that section 12 of the Delhi School Education Act is unconstitutional as being violative of Articles 14, 21 and 23 of the Constitution. A similar decla ration is sought in regard to Section 21 of the Act also but is not pressed before us. A direction is also sought to the respondents, the Union of India and the Delhi Administration to enforce all the provisions of the Delhi School Education Act, other than Sections 12 and 21, and "to fix the pay, allowances, benefits etc. to persons employed in the schools governed by the Act in relation to unaided minority schools at par with the persons employed in other schools. " It appears that sometime after the filing of the writ petition and before the preliminary heating of the writ petition some developments took place to which it is neces sary to refer here. On May 9, 1986 at 10.30 a.m. the teach ing staff other than those on duty took out 'a silent march ' which was joined by the Class IV staff also. The school hours have a break between 10.00 a.m. and 10.40 a.m. During the break only one or two teachers are on duty. Except those on duty, all the others took part in the 'silent march '. Classes were resumed at 10.40 a.m. and were not affected in any manner. There were no speeches, no shouting of slogans, no violence and no disruption of studies. But even so a notice was issued by the principal on April 10, 1986 warning the members of the staff. Despite the warning a similar 'silent march ' was taken out on April 10, 1986 also. The management issued orders of suspension against Mrs. Malik, Mrs. Dhar, Mrs. Balman and Mr. Bush. While granting 'Rule Nisi ' in the main writ petition, this Court also granted stay of operation of the orders of suspension of the four teachers. The inquiries against them were also stayed. 246 The attack of the petitioner against Section 12 of the Delhi Education Act was based on article 14 while the provi sions were sought to be sustained by the respondents on the basis of Article 30 of the Constitution. While it was argued by Mr. Vaidyanathan, learned counsel for the petitioner that Section 12 was hit by article 14 and that Sections 8 to 11 did not, in any manner, impinge upon Article 30 of the Constitu tion, it was argued, on behalf of the respondents, by the learned Additional Solicitor General and by Shri Frank Anthony, that the classification made by Section 12 was perfectly valid and that, but for Section 12, Sections 8 to 11 would have to be held to interfere with the right guaran teed by article 30 to religious and linguistic minorities to administer educational institutions of their choice and Sections 8 to 11 would consequently be inapplicable to such minority educational institutions. In order to appreciate the controversy between the parties, it is necessary to refer to the scheme and the important provisions of the Delhi School Education Act. The long title of the Act recites that it is "An act to provide for better organisation and development of school education in the Union Territory of Delhi and for matters connected therewith or incidental thereto. " Section 2(d) defines "Aided School" as meaning "a recognised private school which is receiving aid in the form of maintenance great from the Central Government, Administrator or local authority or any other authority designated by the Central Government, Admin istrator or a local authority." "Recognised School" is defined by Section 2(t) to mean "a school recognised by the appropriate authority. ': Section 2(e) defines "appropriate authority" to mean: "(i) in the case of a school recognised or to be recognised by an authority designated or sponsored by the Central Government, that authority; (ii) in the case of a school recognised or to be recognised by the Delhi Administration, the Administrator or any other officer authorised by him in this behalf; (iii) in the case of a school recognised or to be recognised by the Municipal Corporation of Delhi, that Corporation;" We may state here that in the case of the Frank Anthony Public School the appropriate authority is the Delhi Admin istration. Section 2(h) defines 'employee ' to mean "a teach er and includes every other em 247 ployee working in a recognised school". "Minority school" is defined by section 2(o) to mean "a school established and administered by a minority having the right to do so under clause (1) of article 30 of the Constitution". Section 2(x) defines "unaided minority school" to mean "a recognised minority school which does not receive any aid. " It is undisputed that the Frank Anthony Public School is an unaid ed minority school. Chapter II of the Act deals with "estab lishment, recognition, management of and aid to schools." Chapter III deals with school property. Chapter IV consist ing of sections 8 to 12, deals with "Terms and Conditions of service of employees of recognised private schools". Chapter V, consisting of Sections 13 to 15, contains "the provisions applicable to unaided minority schools. " We are concerned with Chapters IV and V. Chapter VI deals with "admission to schools and fees", Chapter VII deals with "Taking over the management of schools" and Chapter VIII with miscellaneous provisions. Going back to Chapter IV, Sections 8(1) empowers the Administrator to make rules regulating 'the minimum qualifications for recruitment, and the conditions of serv ice, of employees of recognised private schools '. The first proviso to Section 8(1) stipulates that salary and rights in respect of leave of absence, age of retirement and pension of an employee of an existing school at the commencement of the Act may not thereafter be varied to his disadvantage. The proviso gives an indication that salary and rights in respect of leave of absence, age of retirement and pension of an employee are covered by the expression "the conditions of service". We mention this because in the course of the argument it was suggested that salary is not a condition of service. Sub section(2) of Section 8 stipulates that, sub ject to any rule that may be made, "no employee of a recog nised private school shall be dismissed, removed or reduced in rank nor shall his service be otherwise terminated except with the prior approval of the Director. " Section 8(3) enables an employee of a recognised private school who is dismissed, removed or reduced in rank to prefer an appeal to the Tribunal constituted under Section 11 against the order of such dismissal, removal or reduction in rank. What is of importance and requires to be noticed is that the prior approval of the Director contemplated by Section 8(2) and the appeal for which provision is made by Section 8(3) are confined to dismissal, removal and reduction in rank and not to other cases of disciplinary action or other administra tive orders of the management. Section 8(2) also provides for the prior approval of the Director in the case of termi nation of service otherwise then dismissal or removal also. Section 8(4) requires the managing committee of a recognised private school to communicate to the Director and to obtain his prior approval before suspending any of its employees. However, the provision 248 enables the managing committee to suspend an employee with immediate effect and without the prior approval of the Director if it is satisfied that such immediate suspension is necessary by reason of the gross misconduct of the em ployee, within the meaning of the Code of Conduct. Such immediate suspension will cease to have effect after fifteen days if approval of the Director is not obtained in the mean while. Section 8(5) authorises the Director to accord his approval to suspension of an employee if he is satisfied that there are adequate and reasonable grounds for such suspension. Section 9 prescribes that every employee of a recognised school shall be governed by the prescribed Code of Conduct and that the employee shall be liable to the prescribed disciplinary action for violation of any provi sion of Code of Conduct. Section 10(1) requires that "the scales of pay and allowances, medical facilities, pension, gratuity, provident fund and other prescribed benefits of the employees of a recognised private school shall not be less than those of the employees of the corresponding status in schools run by the appropriate authority. " The proviso to Section 10(1) requires the appropriate authority to direct in writing the managing committee of any recognised private school to bring the scales of pay and allowances etc. of all the employees of such schools to the level of those of the employees of the corresponding status in schools run by the appropriate authority. A further proviso to Section 10(1) contemplates 'withdrawal of recognition if such direction is not complied with. Section 10(2) requires the managing committee of every aided school to deposit every month its share towards pay and allowances, medical facilities etc. with the Administrator and requires the Administrator dis burse, or cause to be disbursed, the salaries and allowances to the employees of aided schools. Section 11 provides for the constitution of a Tribunal consisting of one person who shall have held the office of a District Judge or any equiv alent judicial office. Section 11(6) provides that the Tribunal shall, for the purpose of disposal of an appeal, have the same powers as are vested in a court of appeal by the Code of Civil Procedure. Then comes Section 12 which says "Nothing contained in this Chapter shall apply to an unaided minority school. " It is because of this provision that Sections 8, 9, 10 and 11 become inapplicable to unaided minority schools. Chapter V consists of Section 13 to 15 and these are the provisions of the Act which are applicable to unaided minority schools only. Section 13 enables the Admin istrator to make rules regulating the minimum qualifications for and method of, recruitment of employees of unaided minority schools. Section 14 prescribes that every employee of an unaided private school shall be governed by such Code of Conduct as may be prescribed. Except in the matter of disciplinary action the 249 Code of Conduct prescribed for employees of unaided minority schools under Section 14 is virtually the same as the Code of Conduct prescribed for all recognised schools under Section 9. Section 15(1) requires the managing committee of every unaided minority school to enter into a written con tract of service with every employee of such school. Section 15(2) provides that a copy of every contract of service shah be forwarded by the managing committee to the Administrator who shah, on receipt of such copy register it. Section 15(3) provides that every contract of service shah provide for "(a) the terms and conditions of service of the employee, including the scale of pay and other allowances to which he shah be entitled; (b) the leave of absence, age of retire ment, pension and gratuity or contributory provident fund in lieu of pension and gratuity, and medical and other benefits to which the employee shah be entitled; (c) the penalties which may be imposed on the employee for the violation of any Code of Conduct or the breach of any term of the con tract entered into by him; (d) the manner in which discipli nary proceedings in relation to the employee shall be con ducted and procedure which shall be followed before any employee is dismissed, removed from service or reduced in rank; (e) arbitration of any dispute arising out of any breach of contract between the employee and the managing committee with regard to (i) the scales of pay and other allowances, (ii) leave of absence, age of retirement, pen sion, gratuity, provident fund, medical and other benefits, (iii) any disciplinary action leading to the dismissal or removal from service or reduction in rank of the employee, (f) any other matter which, in the opinion of the managing committee, out to be, or may be, specified in such contract. " Section 16, which occurs in Chapter VI, is ap plicable to unaided minority schools also and deals with admission to recognised schools. Section 17 and 19 are applicable to both aided and unaided schools. Section 19(1) requires that every recognised higher secondary school shall be affiliated to one or more of the Boards or Councils conducting such examination and shall fulfil the conditions prescribed by the Board or Council. Chapter VII consists of two sections. Section 20 deals with taking over the manage ment of schools and Section 21 provides that Section 20 shall not apply to a minority school. As already mentioned by us, though the question of the vires of Section 21 was also raised in the petition, the point was not pressed before us. The effect of Section 12, as already mentioned by us, is to make Sections 8, 9, 10 and 11 inapplicable to unaided minority schools; First, the Administrator may not make ' rules regulating the conditions of service of employees of unaided minority schools. But so far as the 250 minimum qualifications for recruitment of employees are concerned, Section 13 enables the Administrator to make regulations even in respect of unaided minority schools. Second, the prior approval of the Director need not be obtained for the dismissal, removal, reduction in rank or termination of service otherwise then by dismissal or remov al of an employee of an unaided minority school. Third, against such dismissal, removal or reduction in rank, there is to be no appeal. Fourth, neither piror nor subsequent approval of the Director need be obtained to suspend any of the employees of an unaided minority school. Fifth, the scales of pay and allowance, medical facilities, pension, gratuity, provident fund and other benefits which may be given to employees are subject to no regulation except that they should be contained in a written contract of service and need not conform to the scales of pay and allowances etc. of the employees of the corresponding status in schools run by the appropriate authority as in the case of other recognised private schools. To recall the contentions of the learned counsel for either side, on the one hand it was submitted by Shri C.S. Vaidyanathan, learned counsel for the petitioner that these drastic departures which result from giving effect to section 12, make Section 12 discriminatory and offensive to article 14 of the Constitution. The provisions which are made inapplicable to aided minority institutions because of Section 12 are no more than regulatory measures aimed at the excellence of the institution and in no way impinge on the Fundamental Right of the minorities, religious or linguistic, to administer educational institutions of their choice. On the other hand, it was the contention of the learned Additional Solicitor General that these provisions are inapplicable to minority institutions since they interfere with the right of manage ment vested in the minorities. According to him, payment of salary, allowances etc. is part of the right of the manage ment to appoint members of the staff. The economics of an unaided institution is entirely in the hands of its manage ment and the right of the management to pay such salaries and allowances as the management deems fit is a part and parcel of the right to administer the institution. More so the right to take disciplinary action which cannot be the subject of any supervision by any other authority. But for Section 12, Sections 8 to 11 would impinge on the right of the minorities to administer Educational Institutions of their choice and would therefore, be inapplicable to minori ty Educational Institutions. Shri Frank Anthony made submis sions on the same lines as the learned Additional Solicitor General and in addition pointed out that the Frank Anthony Public School was an Educational Institution of great repute and that the excellence of the 251 institution was such that it did not necessitate any regula tion by any other authority. The excellence of the institu tion spoke for itself. He submitted that the scale of fee charged by the institution was low compared with other private institutions and it was the desire of the management that the scale of fee should continue to be low so that it may be within the reach of the ordinary people whom it was intended to reach. It was because of this desire of the management to keep the scale of fee low that the management could not pay higher salaries and allowances and we were repeatedly told that if Section 12 was struck down and the management was compelled to pay the same scale of salary and allowances as was paid to employees of Government schools, the Frank Anthony Public School would have to be closed down. At this juncture, we may refer to article 30(1) and 30(2) of the Constitution which are as follows: "30(1) All minorities, whether based on reli gion or language, shall have the right to establish and administer educational institu tions of their choice. ( 1 A ) . . . . . . . . (2) The State shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language. " The content of the Fundamental Right guaranteed by article 30(1) of the Constitution has been the subject of several decisions of this Court. The leading case is that a Consti tution bench of seven judges, In re The Kerala Education Bill ; In an oft quoted passage S.R. Das, Chief Justice, explained the content of article 30(1) as fol lows: "The first point to note is that the article gives certain rights not only to religious minorities but also to linguistic minorities. In the next place, the right conferred on such minorities is to establish educational insti tutions of their choice. It does not say that minorities based on religion should establish educational institutions for teaching religion only, or that linguistic minorities should have the right to establish educational insti tutions for teaching their 252 language only. What the article says and means is that the religious and the linguistic minorities should have the right to establish educational institutions of their choice. There is no limitation placed on the subjects to be taught in such educational institutions. As such minorities will ordinarily desire that their children should be brought up properly and efficiently and be eligible for higher university education and go out in the world fully equipped with such intellectual attain ments as will make them fit for entering the public services, educational institutions of their choice will necessarily include institu tions imparting general secular education also. In other words, the article leaves it to their choice to establish such educational institutions as will serve both purposes, namely, the purpose of conserving their reli gion, language or culture, and also the pur pose of giving a thorough, good general educa tion to their children. The next thing to note is that the article, in terms, gives all minorities whether based on religion or lan guage, two rights, namely, the right to estab lish and the right to administer educational institutions of their choice. The key to the understanding of the true meaning and implica tion of the article under consideration are the words "of their own choice". It is said that the dominant words is "choice" and the content of that article is as wide as the choice of the particular minority community may make it. The ambit of the rights conferred by article 30(1) has, therefore, to be determined on a consideration of the matter from the points of view of the educational institutions themselves." Educational Institutions, it was said, could be classi fied into three categories(1) those which did not seek aid or recognition from the State (2) those which sought aid and (3) those which wanted recognition only but not aid. It was said that the institutions of the first category were out side the scope of the Kerala Education Bill the question of vires of whose provisions was referred to the court in the reference. In the second category of schools, it was pointed out, there were two classes, those entitled to receive grants under the Constitution and those which were not entitled to any grant under any provision of the Constitu tion. but, nevertheless, sought aid. Under article 337 of the Constitution. Anglo Indian Schools which were receiving the grant upto March, 31, 1948 were entitled to receive the grants for a period of ten years subject to a graded trien nial diminution. Anglo 253 Indian Schools which were receiving grants. but not more than what they were entitled to receive under article 337 of the Constitution. came within the first class of the second category and it was held that their Constitutional right to receive the grant could not be subjected to any restrictions as those sought to be imposed by the provisions of the Kerala Education Bill. Any attempt to impose any such re strictions on Anglo Indian Schools which received no more aid than that to which they were entitled to receive under the Constitution would infringe their fights under article 337 and under article 30(1) of the Constitution. We may straight away mention here that the period of ten years stipulated by article 337 having expired there is now no question of Anglo Indian Schools being entitled to any special protection. Shri Frank Anthony sought to argue that what was truly decided by the Court was that any condition imposed for granting recognition to unaided minority Educational Insti tutions would infringe on the right of administration grant ed to them by article 30(1) of the Constitution. We do not read the decision as laying down any such proposition. What was decided was that Anglo Indian Schools which were entitled to receive grants under the Constitution and which received no more aid than that to which they were entitled under the Constitution could not be subjected to stringent terms as fresh or additional conditions precedent to enable then to obtain the grant. Such conditions would infringe their fights under article 337 and violate their fights under article 30(1). To place an interpretation as that suggested by Shri Anthony would be subversive of the right guaranteed by article 30(1) since it would make the extent of the right depend on the receipt or non receipt of aid. If one thing is clear. it is this that the Fundamental Right guaranteed by article 30(1) cannot be surrendered, wholly or partly. and the authorities cannot make the grant of aid conditional on the surrender of a part of the Fundamental Right. In the very case it was observed: "Recognition and grant of aid, says Shri G.S. Pathak. is the governmental function and. therefore. the State cannot impose terms as condition precedent to the grant of recogni tion or aid which will be violative of article 30(1). According to the statement of case filed by the State of Kerala. every Christian school in the State is aided by the State. Therefore. the conditions imposed by the said Bill on aided institutions established and administered by minority communities. like the Christians. including the Anglo Indian commu nity. will lead to the closing down of all these aided schools unless they are agreeable to surrender their fundamental right of man agement. No educational institution 254 can in actual practice be carried on without aid from the State and if they will not get it unless they surrender their fights they will, by compulsion of financial necessities, be compelled to give up their fights under article 30(1). The legislative powers conferred on the legislative of the States by articles 245 and 246 are subject to the other provisions of the Constitution and certainly to the provisions of Part III which confers fundamental rights which are, therefore, binding on the State legislature. The State legislature cannot, it is clear, disregard or override those provi sions merely by employing indirect methods of achieving exactly the same result. Even the Legislature cannot do indirectly what it certainly cannot do directly. " The learned Chief Justice then proceeded to consider the case of the Anglo Indian Schools which received aid in excess of that granted by article 337 and the other minority schools which received aid from the Government. One of the principal submissions there was that the gist of the right of administration of a school was the power of appointment, control and dismissal of teachers and other staff and that under the Kerala Education Bill such power of management was practically taken away. Dealing with the submission the learned Chief Justice observed, "The right to administer cannot obviously include the right to maladminister. The minor ity cannot surely ask for aid or recognition for an educational institution run by them in unhealthy surroundings, without any competent teachers possessing any semblance of qualifi cation, and which does not maintain even a fair standard of teaching or which teaches matters subversive of the welfare of the scholars. It stands to reason, then, that the constitutional right to administer an educa tional institution of their choice does not necessarily militate against the claim of the State to insist that in order to grant aid the State may prescribe reasonable regulations to ensure the excellence of the institutions to be aided". Proceeding to consider whether the various clauses of the Bill merely prescribed reasonable regulations or condi tions for the grant of aid, the Court observed that clauses 7, 10, 11(1), 12(1)(2)(3) and (5) might easily be regarded as reasonable regulations or conditions for the grant of aid. We may mention here that Clause 10 of the Bill required 255 the Government to prescribe the qualifications to be pos sessed by persons for appointments as teachers in Government schools and in private schools. The procedure for selection of teachers in Government schools and aided schools was laid down in Clause 11. Clause 12 prescribed the conditions of service of the teachers of aided schools, obviously intended to afford some security of tenure to the teachers of aided schools. It provided that the scales of pay applicable to the teachers of Government schools shall apply to all the teachers of aided schools. Sub Clause (4) of C1. 12 which was not mentioned by the Court as a clause which could easily be regarded as reasonable regulation, provided that no teacher of an aided school shall be dismissed, removed, reduced in rank or suspended by the Manager without the previous sanction of the authorised officer. Clause 11 sub clause (2) was another clause which the court was unable to readily identify as reasonable. In regard of Clauses 9, 11 and 12 the court while holding that they were 'serious inroads on the right of administration ' and that they came 'perilously near violating their right ', nevertheless held, "but considering that these provisions are applicable to all educational institutions and that the impugned parts of Cls. 9,11 and 12 are designed to give protection and security to the ill paid teachers who are engaged in rendering service to the nation and protect the backward classes, we are prepared as at present advised, to treat these clauses 9, 11 (2) and 12(4) as permissible regulations which the State may impose on the minorities as a condition for granting aid to their educational institutions. " In Rev. Sidhajbhai Sabhai and others vs State of Bombay and another; , the Court summarised the decision in the ' reference in regard to the Kerala Education Bill and proceeded to observe: "The right established by article 30(1) is a fundamental right declared in terms absolute. Unlike the fundamental freedoms guaranteed by article 19, it is not subject to reasonable restrictions. It is intended to be a real right for the protection of the minorities in the matter of setting up of educational insti tutions of their own choice. The right is intended to be effective and is not to be whittled down by so called regulative measures conceived in the interest not of the minority educational institution, but of the public or the nation as a whole. If every order Which while maintaining the formal character of a minority institution destroys the power of administration is held justifiable because it is in the public or national interest, though not in its interest as 256 an educational institution, the right guaran teed by article 30(1) will be but a "teasing illusion", a promise of unreality. Regulations which may lawfully be imposed either by legis lative or executive action as a condition of receiving grant or of recognition must be directed to making the institution while retaining its character as a minority institu tion effective as an educational institution. Such regulation must satisfy a dual test the test of reasonableness, and the test that it is regulative of the educational character of the institution and is conducive to making the institution an effective vehicle of education for the minority community or other persons who resort to it." In State of Kerala etc. vs Mother Provincial etc. ; , It was conceded by the petitioners representing the minority communities (as indeed they were bound to do having regard to the authorities of the Court) that the State or the University to which these institutions were affiliated may prescribed standards of teaching and the Scholastic efficiency expected from colleges. It was also conceded that to a certain extent conditions of employment of teachers, hygiene and physical training of students can be regulated. While administration was explained "management of the af fairs" of the institution and it was said that this manage ment should be free of control so that the institution could be moulded in accordance with the management 's ideas of how the interests of the community in general and the institu tion in particular would be best served. It was pointed out that there was an exception to this and it was that the standards of education were not a part of management as such. It was said, "These standards concern the body politic and. are dictated by considerations of the advance ment of the country and its people. Therefore, if universities establish syllabi for examina tions they must be followed, subject however to special subjects which the institutions may seek to teach, and to certain extent the State may also regulate the conditions of employment of teachers and the health and hygiene of students. Such regulations do not bear direct ly upon management as such although they may indirectly affect it. Yet the right of the State to regulate education, educational standards and allied matters cannot be denied. The minority institutions cannot be allowed to fail below the standards of excellence expect ed of educational institutions. or under the guise of exclusive right of management, to decline to 257 follow the general pattern. While the manage ment must be left to them, they may be com pelled to keep in step with others. " One of the questions in the case related to the validity of Section, 56 sub sections (2) and (4). Section 56(2) provided that no teacher of a private college should to dismissed, removed or reduced in rank without the previous sanction of the Vice Chancellor or placed under suspension for a contin uous period exceeding fifteen days without such previous sanction. Section 56(4) provided that a teacher against whom disciplinary action was taken shall have a right of appeal to the Syndicate. It was held that these provisions clearly took away the disciplinary action from the governing body and the managing council and conferred it on the University. The view of the High Court that Subsections (2) and (4) were ultra vires Article 30(1) of the Constitutions in respect of minority institutions was upheld. The Ahemedabad St. Xaviers College Society & Anr., vs State of Gujarat & Anr., ; was the decision of a Nine Judge Constitution Bench. Ray, C.J. with whom Palekar, J. agreed stated in his opinion, after referring to the State of Kerala vs Mother Provincial etc. (supra) as follows: "Affiliation of minority institutions is intended to ensure the growth and excellence of their children and other students in the academic field. Affiliation mainly pertains to the academic and educational character of the institution. Therefore, measures which will regulate the courses of study, the qualifica tions and appointment of teachers, the condi tions of employment of teachers, the health and hygiene of students, facilities for li braries and laboratories are all comprised in matters germane to affiliation of minority institutions. These regulatory measures for affiliation are for uniformity, efficiency and excellence in educational courses and do not violate any fundamental right of the minority institutions under Article 30. " Section 51A of the Act which was impugned in that case provided that no member of the teaching and non teaching staff of an affiliated college shall be dismissed, removed or reduced in rank except with the approval of the Vice Chancellor: Ray, C.J. held that the provision could not be said to be permissive regulatory measure inasmuch it con ferred arbitrary power on the Vice Chancellor to take away the 258 right of the minority institutions. It could not, therefore, be applied to minority institutions. Section 52A of the Act contemplated reference of any dispute connected with the conditions of service, between the governing body and any member. of the teaching and non teaching staff of an affili ated college to an Arbitration Tribunal consisting of one member nominated by the governing body, one member nominated by the affected member and an umpire appointed by the Vice Chancellor. This provision was also held to be inapplicable to minority institutions as the references to arbitration would introduce an area of litigious controversy in educa tional institutions and displace the domestic jurisdiction of the governing body. Jaganmohan Reddy, J. speaking for himself and Alagiri Swami, 3., agreed with the conclusions of Ray, C.J. and made some observations of his own. He observed: "The right under article 30 cannot be exercised in vacue. Nor would it be right to refer to affiliation or recognition as privileges granted by the State. In a democratic system of Government with emphasis an education and enlightenment of its citizens, there must be elements which give protection to them. The meaningful exercise of the right under article 30(1) would and must necessarily involve recognition of the secular education imparted by the minority institutions without which the right will be a mere husk. This Court has so far consistently struck down all attempts to make affiliation or recognition on terms tentamount to surrender of its rights under article 30(1) as abridging or taking away those rights. Again as without affiliation there can be no meaningful exercise of the right under article 30(1), the affiliation to be given should be consistent with that right, nor can it indirectly try to achieve what it cannot directly do. " Khanna, J. pointed out, "The idea of giving special fights to the minorities is not to have a kind of a privileged or pampered section of the population but to give to the minor ities a sense of security and a feeling of confidence. " Later dealing with the 'scope ' and 'ambit ' of the right guaranteed by article 30(1), he said: "The clause confers a right on all minorities, whether they are based on religion or lan guage, to establish and administer educational institutions of their choice. The right con ferred by the clause is in absolute terms and is not subject 259 to restrictions as in the case of rights conferred by Article 19 of the Constitution. The right of the minorities to administer educational institutions does not, however, prevent the making of reasonable regulations in respect of those institutions, The regula tions have necessarily to be made in the interest of the institution as a minority educational institution. They have to be so designed as to make it an effective vehicle for imparting education. The right to adminis ter educational institutions can plainly not include the right to maladminister. Regula tions can be made to prevent the housing of an educational institution in unhealthy surround ings as also to prevent the setting up or continuation of an educational institution without qualified teachers. The State can prescribe regulations to ensure the excellence of the institution. Prescription of standards for educational institutions does not militate against the right of the minority to adminis ter the institutions. Regulations made in the true interests of efficiency of instruction, discipline, health. sanitation, morality, public order and the like may undoubtedly be imposed. Such regulations are not restrictions on the substance of the right which is guaran teed: they secure the proper functioning of the institution, in matters educational (see observations of Shah J. in Rev. Sidhajbhai Sabhai, supra p. 850). Further, as observed by Hidayatullah CJ., in the case of very Rev. Mother provincial (supra) the standards con cern the body politic and are dictated by considerations of the advancement of the country and its people. Therefore, if univer sities establish syllabi for examinations they must be followed, subject however to special subjects which the institutions may seek to teach, and to a certain extent the State may also regulate the conditions of employment of teachers and the health and hygiene of stu dents. Such regulations do not bear directly upon management as such although they may indirectly affect it. Yet the right of the State to regulate education, educational standards and allied matters cannot be denied. The minority institutions cannot be allowed to fail below the standards of excellence expect ed of educational institutions, or under the guise of exclusive right of management, to decline to follow the general pattern. While the management must be left to them, they may be compelled to keep in step with others. 260 It is, in my opinion, permissible to make regulations for ensuring the regular payment of salaries before a particular date of the month. Regulations may well provide that the funds of the institution should be spent for the purposes of education or for the betterment of the institution and not for extraneous purposes. Regulations may also contain provisions to prevent the diversion of funds of institutions to the pockets of those incharge of management or their embezzlement in any other manner. Provisions for audit of the accounts of the institution would be permissible regulation. Likewise, regulations may provide that no antinational activity would be permitted in the educational institu tions and that those employed as members of the staff should not have been guilty of any activities against the national interest. Minorities are as much part of the nation as the majority, and anything that impinges upon national interest must necessarily in its ultimate operation affect the interests of all those who inhibit this vast land irrespective of the fact whether they belong to the majori ty or minority sections of the population. It is, therefore, as much in the interest of minorities as that of the majority to ensure that the protection afforded to minority institutions is not used as a cloak for doing something which is subversive of national interests. Regulations to prevent antinational activities in educational institutions can, therefore, be considered to be reasonable. A regulation which is designed to prevent maladministration of an educational institution cannot be said to offend clause (1) of article 30. At the same time it has to be ensured that under the power of making regulations nothing is done as would detract from the character of the institution as a minority educational institution or which would impinge upon the rights of the minori ties to establish and administer educational institutions of their choice. The right con ferred by article 30(1) is intended to be real and effective and not a mere pious and ab stract sentiment; it is a promise of reality and not a teasing illusion. Such a right cannot be allowed to be whittled down by any measure masquerading as a regulation. As observed by this Court in the case of Rev. Sidhajbhai Singh (supra, regulations which may lawfully be imposed either by legislative or executive action as a condition of receiving grant or of recognition 261 must be directed to making the institution while retaining its character as minority institution effective as an educational insti tution. Such regulation must satisfy a dual test the test of reasonableness, and the test that it is regulative of the educational character of the institution and is conducive to making the institution an effective vehicle of education for the minority community or Other persons who resort to it. " Dealing with the right of the management of a minority educational institution to exercise disciplinary control over the teachers, he observed: "Although disciplinary control over the teach ers of a minority educational institution would be with the governing council, regula tions, in my opinion, can be made for ensuring proper conditions of service of the teachers and for securing a fair procedure in the matter of disciplinary action against the teachers. Such provisions which are calculated to safeguard the interest of teach ers would result in security of tenure and this inevitably attract competent persons for the posts of teachers. Such a provision would also eliminate a potential cause of frustra tion amongst the teachers. Regulations made for this purpose should be considered to be in the interest of minority educational institu tions and as such they would not violate article 30(1). " However, Khanna, J. held that Section 51A which gave blanket power to the Vice Chancellor to veto the disciplinary action of the management body and section 52A which provided for the nomination of an umpire by the Vice Chancellor were both objectionable. It is important to note here that what was considered objectionable in Section 52A was not the provi sion for an Arbitration Tribunal but the right given to the Vice Chancellor to nominate the Umpire. The Learned Judge said: "It may also be stated that there is nothing objectionable to selecting the method of arbitration for settling major disputes con nected with conditions of service of staff of educational institutions. It may indeed be a desideratum. What is objectionable, apart from what has been mentioned above, is the giving of the power to the ViceChancellor to nominate the Umpire. Normally in such dis 262 putes there would be hardly any agreement between the arbitrator nominated by the gov erning body of the institution and the one nominated by the concerned member of the staff. The result would be that the power would vest for all intents ' and purposes in the nominee of the Vice Chancellor to decide all disputes between the governing body and the member of the staff connected with the latter 's conditions of service. The governing body would thus be hardly in a position to take any effective disciplinary action against a member of the staff. This must cause an inroad in the right of the governing body to administer the institution. Section 52A should, therefore, be held to be violative of article 30(1) so far as minority educational institutions are concerned. " Mathew, J. speaking for himself and Chandrachud, J. ob served: "In considering the question whether a regula tion imposing a condition subserves the pur pose for which recognition or affiliation is granted, it is necessary to have regard to what regulation the appropriate authority may make and impose in respect of an educational institution established and administered by a religious minority and receiving to recogni tion or aid. Such an institution will, of course, be subject to the general laws of the land like the law of taxation, ' law relating to sanitation, transfer of property, or regis tration of documents, etc., because they are laws affecting not only educational institu tions established by religious minorities but also all other persons and institutions. It cannot be said that by these general laws, the State in any way takes away or abridges the right guaranteed under Article 30(1). Because article 30(1) is couched in absolute terms, it does not follows that the right guaranteed is not subject to regulatory laws which would not amount to its abridgement. It is a total misconception to say that because the right is couched in absolute terms, the exercise of the right cannot be regulated or that every regu lation of that right would be an abridgement of the right. " Again he said: "The question to be asked and answered is whether the particular measure is regulatory or whether it crosses the 263 zone of permissible regulation and enters the forbidden territory of restrictions or abridgement. So, even if an educational insti tution established by a religious or linguis tic minority does not seek recognition, affil iation or aid, its activity can be regulated in various ways provided the regulations do not take away or abridge the guaranteed right. Regular tax measures, economic regulations, social welfare legislation, wage and hour legislation and similar measures may, of course have some effect upon the right under article 30(1). But where the burden is the same as that borne by others engaged in dif ferent forms of activity, the similar impact on the right seems clearly insufficient to constitute an abridgement, if an educational institution established by a religious minori ty seeks no recognition, affiliation or aid, the state may have no right to prescribe the curriculum, syllabi or the qualification of the teachers. We find it impossible to subscribe to the proposition that State necessity is the criterion for deciding whether a regulation imposed on an educational institution takes away or abridges the right under Article 30(1): If a legislature can impose any regula tion which it thinks necessary to protect what in its view is in the interest of the State or society, the right under Article 30(1) will cease to be a fundamental right. It sounds paradoxical that a right which the Constitu tion makers wanted to be absolute can be subjected to regulations which need only satisfy the nebulous and elastic test of state necessity. The very purpose of incorporating this right in Part III of the Constitution in absolute terms in marked contrast with the other fundamental fights was to withdraw it from the reach of the majority. To subject the right today to regulations dictated by the protean concept of state necessity as con ceived by the majority would be to subvert the very purpose for which the right ' was given. " The learned Judge also pointed out that where besides recog nition or affiliation, an educational institution conducted by a religious minority is granted aid, further regulations for ensuring that the aid is utilized for the purpose for which it is granted would be permissible. "The heart of the matter" said the learned Judge. "is that no educational institution established by a religious or linguistic minori ty can claim total immunity from regulations by the legisla ture or the university if it 264 wants affiliation or recognition; but the character of the permissible regulations must depend upon their purpose. As we said, such regulations will be permissible if they are relevant to the purpose of securing or promoting the object of recognition or affiliation. " Referring to Section 51A Mathew, J. said that uncanalized power without any guideline to withhold approval would be a direct abridgement of the right of the management to dismiss or remove a teacher or inflict any other penalty after conducting an enquiry. He, however, took care to point out that it would be open to the State in the exercise of its regulatory power to require that before the services of a teacher are terminated, he should be given an opportunity to be heard in his defence. The objection was to the blanket power given to the Vice Chancellor without any guideline as to the manner of its exercise. Referring to Section 52A, the learned Judge felt that it subserves no purpose and would lead to needless interference with the day to day management of the institu tion. Every petty dispute raised by the teaching or non teaching staff would have to be referred to arbitration if it seemed to touch the service conditions. "Arbitration, not in parting education, will become the business of education al institutions", said the learned Judge. Beg, J. and Dwive di, J. who appeared to constitute the minority delivered separate opinions and it is sufficient to say that both of them upheld the vires of Section 51A and Section 52 A. In All Saints High School etc. vs The Government of Andhra Pradesh; , Chandrachud, C.J. after referring to several earlier decisions of the Court said, These decisions show that while the right of the religious and linguistic minorities to establish and administer educational institu tions of their choice cannot be interfered with, restrictions by way of regulations for the purpose of ensuring educational standards and maintaining the excellence thereof can be validly prescribed. For maintaining education al standards of an institution, it is neces sary to ensure that it is competently staffed. Conditions of service which prescribe minimum qualifications for the staff, their pay scales their entitlement to other benefits of service and the laying down of safeguards which must be observed before they are removed or dis missed from service or their services are terminated are all permissible measures of a regulatory character." 265 Section 3(1) of the impugned Act in that case provided that no teacher employed in any private educational institution shall be dismissed, removed or reduced in rank nor his appointment otherwise terminated except with the prior approval of the competent authority. The provision was struck down on the ground that it gave wide and untrammelled discretion to interfere with the management 's right to dismiss, remove, reduce in rank or otherwise terminate the teacher 's services. However Section 3(3) (which provided that no teacher shall be placed under suspension except when an inquiry into the gross misconduct of such teacher was contemplated) was upheld as not violative of Article 30(1) of the Constitution. Chandrachud, C.J. observed that the provision was founded so patently on plain reason that it was impossible to construe it as an invasion of the right to administer an institution, unless that right carried with it the right to maladminister. Section 4 of the Act made a provision for an appeal against an order of dismissal, removal, reduction in rank or otherwise termination of appointment or alteration to the teacher 's disadvantaged of pay or allowances or any other conditions of service. This provision was also struck down as unconstitutional as it gave a right of appeal both on fact and law thereby throwing open the order of the management to the Unguided scrutiny and unlimited review of the appellate authority. Section 8 required the management to obtain prior approval of the competent authority if retrenchment of teacher rendered necessary by any order of the Government relating to educa tion or course of instruction or any other matter. This provision was upheld as valid. Section 7 which provided that the pay and allowances of a teacher shall be paid on or before such day of a month in such manner and by or through such authority as may be prescribed was held to regulatory in character. Fazal Ali, J. after quoting in extenso from the earlier judgments of the Court and culling out the principles which according to him emerged from the earlier decisions say, "It is, therefore, open to the Government or the University to frame rules and regulations governing the conditions of service of teach ers in order to secure their tenure of service and to appoint a high authority armed with sufficient guidance to see that the said rules are not vitiated or the members of the staff are not arbitrarily treated or innocently victimised. In such a case the purpose is not to interfere with the internal administration or autonomy of the institution but it is merely to improve the excellence and efficien cy of the education because a really good education can be received only if the tone and temper of the teachers are 266 so flamed as to make them teach the students With devotion and dedication and put them above all controversy. But while setting up such an authority care must be taken to see that the said authority is not given blanket and uncanalised and arbitrary powers so as to act at their own sweet will ignoring the very spirit and objective of the institution. It would be better if the authority concerned associates the members of the governing body or its nominee in its deliberation so as to instil confidence in the founders of the institution or the committees constituted by them." Fazal Ali, J. held that Section 3(2) was violative of Arti cle 30(1) of the Constitution and would have no application to minority institutions. He was of the view that Section (3), Sub section (3), sub clauses (a) and (b) were also violative of Article 30(1) of the Constitution. The provi sion for an appeal in Section 4 and the provision against retrenchment contained in Section 6 were both held to be inapplicable to minority institutions. Section 7 was upheld as innocuous. Kailasam, J. after referring to the earlier cases stated as follows: "A reading of the decisions referred to above makes it clear that while the right to estab lish and administer a minority institution cannot be interferred with restrictions by way of regulations for the purpose of maintaining the educational standards of the institution can be validly imposed. For maintaining the educational standard of the institution as a whole it is necessary to ensure that it is properly staffed. Conditions imposing the minimum qualifications of the staff, their pay and other benefits, their service conditions, the imposition of punishment will all be covered and regulations of such a nature have been held to be valid. In the case of institu tions that receive aid it is the duty of the Government who grants aid to see that the funds are properly utilised. As the Government pays for the staff it is their bounden duty to see that well qualified persons are selected, their pay and other emoluments are guaranteed and service conditions secured. So far as the institutions receiving aid are concerned if the regulations are made for the purpose of safeguarding the rights of the staff the validity cannot be questioned as long as the regulations do not discriminate the minority institution on the ground of religion or language." 267 Kailasam, 1. was of the view that the whole of section 3 was valid. There were sufficient guidelines indicated in the Act for the exercise of the powers under Section 3(1) and (2). Sections 3(3)(a)(b) and 3(4) were intended to safeguard the teachers from suspension for unduly long periods without there being an enquiry into gross misconduct and could not be said to interfere with the right of administration of the private institutions. With regard to Section 3(4) the learned Judge said it was purely regulatory. Sections 6 and 7 were also upheld. Thus, there, now, appears to be a general and broad consensus about the content and dimension of the Fundamental Right guaranteed by Article 30(1) of the Constitution. The right guaranteed to religious and linguistic minorities by article 30(1) is two fold, to establish and to administer educational institutions of their choice. The key to the Article lies in the words "of their own choice". These words indicate that the extent of the right is to be determined, not with reference to any concept of State necessity and general societal interest but with reference to the educa tional institutions themselves, that is, with reference to the goal of making the institutions "effective vehicles of education for the minority community or other persons who resort to them". It follows that regulatory measures which are designed towards the achievement of the goal of making the minority educational institutions effective instruments for imparting education cannot be considered to impinge upon the right guaranteed by Article 30(1) of the Constitution. The question in each case is whether the particular measure is, in the ultimate analysis, designed to achieve such goal, Without of course nullifying any part of the right of man agement in substantial measure. The provisions embodied in Sections 8 to 11 of the Delhi Schools Education Act may now be measured alongside the Fundamental Right guaranteed by Article 30(1) of the Constitution to determine whether any of them impinges on that fundamental right. Some like or analogous provisions have been considered in the cases to which we have referred. Where a provision has been consid ered by the Nine Judge Bench in Ahmedabad St. Xaviers Col lege vs State of Gujarat (supra), we will naturally adopt what has been said therein and where the Nine Judge Bench is silent we will have recourse to the other decisions. The principal controversy between the parties centred around Section 10 which requires that "the scales of pay and allowances, medical facilities, pension, gratuity, provident fund, and other prescribed benefits of the employees of the recognised private school shall not be less than these of the corresponding status run by the appro 268 priate authority". The submission on behalf of the respond ents was that the right to appoint members of staff being an undoubted right of the management and the right to stipulate their salaries and allowances etc. being part of their right to appoint, such right could not be taken away from the management of a minority institution. The learned Solicitor General very fairly stated before us that there was no case in which it had been held that the right to pay whatever salaries and allowances they liked and stipulate whatever conditions they liked was part of the right to administer the minority institutions under Article 30(1) of the Constitution. On the other hand as we shall immediately point out there are observations to the contrary. In the Nine Judge Bench case, Ray, CJ. and Palekar, J. as we have already seen, expressed the view that the condi tions of employment of teachers was a regulatory measure conducive to uniformity, efficiency and excellence in educa tional courses and did not violate the fundamental right of the minority institutions under Article 30. Jaganmohan Reddy, J. and Alagiriswami, J. who agreed with the conclu sions of Ray, C.J. did not say anything expressly about salary, allowances and other conditions of employment of teachers. Khanna, J. expressed the view that to a certain extent the State may also regulate the conditions of employ ment of teachers and added that it would be permissible to make regulations for ensuring the regular payment of sal aries before a particular date of the month. The latter statement of Khanna, J., it was a contended for the respond ents, limited the extent of the right of the State. to regulate the conditions of employment of teachers. We cannot agree with this contention. The statement that the State may make regulations for ensuring the regular payment of sal aries before a particular date of the month was in addition to what was said earlier that to a certain extent the State may also regulate the conditions of employment of teachers. In fact, while dealing with the question of disciplinary control, Khanna, J., also said that provisions calculated to safeguard the interest of teachers would result in security of the tenure and that would inevitably attract competent persons for the posts of teachers. The same thing may be said about better scales of pay and decent conditions of service. Mathew, J. with whom Chandrachud, J. agreed also indicated that economic regulations, social welfare legisla tion, wage and hour legislation and similar measures, where the burden was the same as that borne by others would not be considered an abridgement of the right guaranteed by Article 30(1). Thus, we see that most of the learned Judges who constituted the Nine Judge Bench were inclined to the view that prescription of conditions of service which would. have the effect of attracting better 269 and competent teachers would not be considered violative of the fundamental right guaranteed by Article 30(1) of the Constitution. That would rightly be so because the mere prescription of scales of pay and other conditions of serv ice would not jeopardise the right of the management of minority institutions to appoint teachers of their choice. The excellence of the instruction provided by an insti tution would depend directly on the excellence of the teach ing staff, and in turn, that would depend on the quality and the contentment of the teachers. Conditions of service pertaining to minimum qualifications of teachers, their salaries, allowances and other conditions of service which ensure security, contentment and decent living standards to teachers and which will consequently enable them to render better service to the institution and the pupils cannot surely be said to be violative of the fundamental right guaranteed by article 30(1) of the Constitution The management of a minority Educational institution cannot be permitted under the guise of the fundamental right guaranteed by article 30(1) of the Constitution, to oppress or exploit its employ ees any more than any other private employee. Oppression or exploitation of the teaching staff of an educational insti tution is bound to lead, inevitably, to discontent and deterioration of the standard of instruction imparted in the institution affecting adversely the object of making the institution an effective vehicle of education for the minor ity community or other persons who resort to it. The manage ment of minority institution cannot complain of invasion of the fundamental right to administer the institution when it denies the members of its staff the opportunity to achieve the very object of article 30(1) which is to make the institu tion an effective vehicle of education. Apart from the learned Judges who constituted the Nine Judge Bench, other learned Judges have also indicated the same view. In the leading case of the Kerala Education Bill, the Constitution Bench observed that, as then advised, they were prepared to treat the clauses which were designed to give protection and security to the ill paid teachers who were engaged in rendering service to the nation as permissi ble regulations. The observations were no doubt made in connection with the grant of aid to educational institutions but that cannot make any difference since, aid, as we have seen, cannot be made conditional on the surrender of the right guaranteed by Article 30(1). In State of Kerala vs Mother Provincial, (supra), it was said that to a certain extent the State may regulate conditions of employment of teachers. In All Saints High School. vs Government of Andhra Pradesh, 270 Chandrachud, C.J., expressly stated that for the maintenance of educational standards of an institution it was necessary to ensure that it was competently staffed and therefore, conditions of service prescribing minimum qualifications for the staff, their pay scales, their entitlement other bene fits of service and the safeguards which must be observed before they were removed or dismissed from service or their services terminated were permissible measures of a regulato ry character. Kailasam, J. expressed the same view in almost identical language. We, therefore, hold that Section 10 of the Delhi Education Act which requires that the scales of pay and allowances, medical facilities, pension, gratuity, provident fund and other prescribed benefits of the employ ees of a recognised private school shall not be less than those of the employees of the corresponding status in schools run by the appropriate authority and which further prescribes the procedure for enforcement of the requirement is a permissible regulation aimed at attracting competent staff and consequently at the excellence of the educational institution. It is a permissible regulation which in no way 'detracts from the fundamental right guaranteed by article 30(1), to the minority institutions to administer their educational institutions. Therefore, to the extent that Section 12 makes Section 10 inapplicable to unaided minority institutions, it is clearly discriminatory. Section 8(1) merely empowers the Administrator to make rules regulating the minimum qualifications for recruitment, and the conditions of service of recognised private schools. Section 8(1) is innocuous and in fact Section 13 which applies to unaided minority schools is almost on the same lines as Section 8(1). The objection of the respondents is really to Section 8(2), 8(3), 8(4) and 8(5) whose effect is (1) to require the prior approval of the Director for the dismissal, removal, reduction in rank or other termination of service of an employee of a recognised private school, (2) to give a right of appeal to a Tribunal consisting of a single member who shall be a District Judge or who has held an equivalent judicial office, (3) to require prior approval of the Director if it is proposed to suspend an employee unless immediate suspension is necessary by reason of the gross misconduct of the employee in which case the suspen sion shall remain in force for not more than 15 days unless approval of the Director is obtained in the mean while. In the Nine Judge Bench case Ray, C.J. and Palekar, J. took the view that Section 51A of the Gujarat Act which provided that no member of the staff of an affiliated college shall be dismissed, removed or reduced in rank except with the ap proval of the Vice Chancellor was violative of Article 30(1) as it conferred arbitrary power on the Vice Chancellor to take away rights of the minority institutions. Simi 271 larly, Section 52A which contemplated reference of any dispute connected with conditions of service between the governing body and any member of the staff to an Arbitration Tribunal consisting of one member nominated by the governing body, one member nominated by the member of the staff and an umpire appointed by the Vice Chancellor was also held to be violative of Article 30(1). It was said that this provision would introduce an area of litigious controversy in educa tional institutions and displace the domestic jurisdiction of the management. Jaganmohan Reddy, J. and Alagiriswami, J., agreed with the conclusions of Ray, C.J. Khanna, J. thought that the blanket power given by Section 51A to the Vice Chancellor to veto the disciplinary action and the power given by Section 52A to the Vicechancellor to nominate an umpire were both objectionable, though he observed that there was nothing objectionable in selecting the method of arbitration for settling major disputes. Mathew, J., also objected to the blanket power given to the Vice Chancellor by Section 51A. He also thought that Section 52A was too wide and permitted needless interference in day to day affairs of the institution by providing for arbitration in petty disputes also. Keeping in mind the views of the sever al learned Judges, it becomes clear that Section 8(2) must be held to be objectionable. Section 8(3) provides for an appeal to the Tribunal constituted under Section 11, that is, a Tribunal consisting of a person who has held office as a District Judge or any equivalent judicial office. The appeal is not to any departmental official but to a Tribunal manned by a person who has held office as a District Judge and who is required to exercise his powers not arbitrarily but in the same manner as a court of appeal under the Code of Civil Procedure. The right of appeal itself is confined to a limited class of cases, namely, those of dismissal, removal or reduction in rank and not to every dispute be tween an employee and the management. The limited right of appeal, the character of the authority constituted to hear the appeal and the manner in which the appellate power is required to be exercised make the provision for an appeal perfectly reasonable, in our view. The objection to the reference to an Arbitration Tribunal in the Nine Judge Bench case was to the wide power given to the Tribunal to enter tain any manner of dispute and the provision for the ap pointment of umpire by the Vice Chancellor. Those defects have been cured in the provisions before us. Similarly, the provision for an appeal to the Syndicate was considered objectionable in State of Kerala. v Mother Provincial, (supra), as it conferred the right on the university. Section 8(4) would be inapplicable to minority institu tions if it had conferred blanket power on the Director to grant or withhold 272 prior approval in every case where a management proposed to suspend an employee but we see that it is not so. The man agement has the right to order immediate suspension of an employee in case of gross misconduct but in order to prevent an abuse of power by the management a safeguard is provided to the employee that approval should be obtained within 15 days. The Director is also bound to accord his approval if there are adequate and reasonable grounds for such suspen sion. The provision appears to be eminently reasonable and sound and the answer to the question in regard to this provision is directly covered by the decision in All Saints High School, where Chandrachud, C.J. and Kailasam, J. upheld Section 3(3) (a) of the Act impugned therein. We may also mention that in that case the right of appeal conferred by Section 4 of the Act was also upheld. How necessary it is to afford some measure of protection to employees, without interfering with the management 's right to take disciplinary action, is illustrated by the action taken by the management in this very case against some of the teachers. These teach ers took part along with others in a 'silent march ', first on April 9, 1986 and again on April 10, 1986, despite warn ing by the principal. The march was during the break when there were no classes. There were no speeches, no chanting or shouting of slogans, no violence and no disruption of studies. The behaviour of the teachers appears to have been orderly and exemplary. One would have thought that the teachers were, by their silent and dignified protest, set ting an example and the soundest of precedents to follow to all agitators everywhere. But instead of sympathy and appre ciation they were served with orders of immediate suspen sion, something which would have never happened if all the provisions of Section 8 were applicable to the institution. Thus, Sections 8(1), 8(3), 8(4) and 8(5) do not encroach upon any right of minorities to administer their educational institutions. Section 8(2), however, must, in view of the authorities, be held to interfere with such right and, therefore, inapplicable to minority institutions. Section 9 is again innocuous since Section 14 which applies to unaided minority schools is virtually on the same lines as Section 9. We have already considered Section 11 while dealing with Section 8(3). We must, therefore, hold that Section 12 which makes the provisions of Chapter IV inapplicable to unaided minority schools is discriminatory not only because it makes Section 10 inapplicable to minority institutions, but also because it makes sections 8(1), 8(3), 8(4), 8(5), 9 and 11 inapplicable to unaided minority institutions. That the Parliament did not understand Sections 8 to 11 as offending the fundamental right guaranteed to the minorities under Article 30(1) is 273 evident from the fact that Chapter IV applies to aided minority institutions and it cannot for a moment be suggest ed that surrender of the right under Article 30(1) is the price which the aided minority institutions have to pay to obtain aid from the Government. The result of our discussion is that Section 12 of the Delhi School Education Act which makes the provisions of Chapter IV inapplicable to unaided minority institutions is discriminatory and void except to the extent that it makes Section 8(2) inapplicable to unaided minority institutions. We, therefore, grant a declaration to that effect and direct the Union of India and the Delhi Administration and its officers, to enforce the provisions of Chapter IV (except 'Section 8(2) in the manner provided in the Chapter in the case of the Frank Anthony Public School. The management of the school is directed not to give effect to the orders of suspension passed against the members of the staff. After the arguments of both sides were fully heard, Shri Sushil Kumar who appeared for the institution along with Mr. Anthony submitted that according to the instructions of the Council for the Indian School Certificate Examination, "the staff must be paid salaries and allowances not lower than those paid in comparable to Government schools in the State in which the school is located" and in view of this instruc tion it was not necessary for us to go into the question of the applicability of Section 10 to minority institutions. We do not attach any significance to this last minute, desper ate submission. It is not clear whether the instruction is a condition imposed by the Council pursuant to section 10 of the Delhi School Education Act. There is no way by which the staff can seek to enforce the instruction. Nor is the in struction of any relevance since it is not the case of the respondents that the institution is paying or is agreeable to pay the scales of pay stipulated in the instruction. We must refer to the submissions of Mr. Frank Anthony regarding the excellence of the institution and the fear that the institution may have to close down if they have to pay higher scales of salary and allowances to the members of the staff. As we said earlier the excellence of the institu tion is largely dependent on the excellence of the teachers and it is no answer to the demand of the teachers for higher salaries to say that in view of the high reputation enjoyed by the institution for its excellence, it is unnecessary to seek to apply provisions like Section 10 of the Delhi School Education Act to the Frank Anthony Public School. On the other hand, we should think that the very contribution made by the teachers to earn for the institution the 274 high reputation that it enjoys should spur the management to adopt at least the same scales of pay as the other institu tions to which Section 10 applies. Regarding the fear ex pressed by Shri Frank Anthony that the institution may have to close down we can only hope that the management will do nothing to the nose to spite the face, merely to 'put the teachers in their proper place '. The fear expressed by the management here has the same ring as the fear expressed invariably by the management of every industry that disas trous results would follow which may even lead to the clos ing down of the industry if wage scales are revised. S.R. Petition allowed.

Chapter IV of the Delhi School EdUcation Act, comprising of sections 8 to 12 deal with "Terms and conditions of service of employees of recognised private schools". Chapter V consisting of sections 13 to 15 contains "the provisions applicable to unaided minority schools". Section 10(1) specifically requires that, "the scales of pay and allow ances. medical facilities, pension, gratuity, provident fund and other prescribed benefits of the employees of a recog nised private school shall not be less than those of the employees of the corresponding status in schools run by the appropriate authority". But section 12 provides, "Nothing contained in this Chapter shall apply to an unaided minority school. " Chapter V contains certain provisions relating to unaided minority schools. The effect of section 12 of the Act is to make sections 8,9,10 and 11 inapplicable to unaided minority schools: First, the Administrator may not make rules regulating the conditions of service of employees of unaided minority schools. But so far as the minimum qualifications for re cruitment of employees are concerned, Section 13 enables the Administrator to make regulations even in respect of unaided minority schools. Second, the prior approval of the Director need not be obtained for the dismissal. removal. reduction in rank or termination of service otherwise than by dismiss al or removal of an employee of an unaided minority school. Third. against such dismissal. removal or reduction in rank, there is to be no appeal. Fourth, neither prior nor subse quent approval of the Director need be obtained to suspend any of the employees of an unaided minority school Fifth, the scales of pay and allowances. medical facilities, pen sion. gratuity. provident fund and other 239 benefits which may be given to employees are subject to no regulation except that they should be contained in a written contract of service and need not conform to the scales of pay and allowances etc. of the employees of the correspond ing status in schools run by the appropriate authority as in the case of other recognised private schools. Frank Anthony Public School is a recognised unaided minority school within the meaning of sections 2(x) read with 2(e), 2(o) and 2(t) of the Act. In the matter of emolu ments and conditions of service such as leave etc. , teachers and employees of the Frank Anthony Public School lag far behind the teachers and employees of Government schools. Several other conditions of service of teachers and employ ees also comare unfavourably with the conditions of service of teachers and employees of Government Schools. But for section 12 and if sections 8 to 11 were applicable to them, they would at least be as well off as teachers and other employees of Government Schools. The Petitioner association, therefore, has filed the writ petition under Article 32 of the Constitution, seeking equalisation of their pay scales and conditions of service with those of their counterparts in Government Schools and for a declaration that section 12 of the Act is void and constitutionally invalid as offending Articles 14, 21 and 23 of the Constitution. Sometime after the filing of the writ petition and before the preliminary hearing of the writ petitions, some developments took place. On May 9, 1986 at 10.30 A.M. during the daily school break between 10 A.M. and 10.40 A.M. the teaching staff other than one or two teachers who are re quired to be on duty, took out a "silent march" which was joined by the Class IV Staff also. Except those on duty, all the others took part in the "silent march". Classes were resumed at 10.40 A.M. and were not affected in any manner. There were ' no speeches, no shouting of slogans. no violence and no disruption of studies. But even so a notice was issued by the principal on April 10, 1986 warning the mem bers of the staff. Despite the warning a similar silent march was taken out on April 10, 1986 also. The management issued orders of suspension against Mrs. Malik, Mrs. Dhar, Mrs. Balman and Mr. Bush. The Petitioner Association chal lenged the said suspension orders as well and sought stay of the operation of the orders of suspension of the four teach ers. The respondents in response to the "Rule Nisi" contend ed; (i) that the classification made by section 12 was perfectly valid; (ii) that but. for section 12, sections 8 to 11 would have to be held to interfere with the right guaranteed by Article 30 of the Constitution to religious 240 and linguistic minorities to administer educational institu tions of their choice; (iii) the petitioner school was an educational institution of great repute whose excellence spoke for itself and therefore it did not necessitate any regulation by any other authority; (iv) that the scale of fee should continue to be low so that it may be within the reach of the ordinary people whom it was intended to reach. It was because of this desire of the management to keep the scale of fee low that the management could not pay higher salaries and allowances; and (v) that if section 12 was struck down and the management was compelled to pay the same scale of salary and allowances as was paid to employees of Government schools, the Frank Anthony Public School would have to be closed down. Allowing the writ petition, the Court, HELD: 1. Section 12 of the Delhi School Education Act which makes the provisions of Chapter IV inapplicable to minority institutions is discriminatory and void not only because it makes section 10 inapplicable to minority insti tutions, but also because it makes sections 8(1), 8(3), 8(4), 8(5), 9 and 11 inapplicable to unaided minority insti tutions. That the Parliament did not understand sections 8 to 11 as offending the fundamental right guaranteed to the minorities under Article 30(1) is evident from the fact that Chapter IV applies to aided minority institutions and it cannot for a moment be suggested that surrender of the right under Article 30(1) is the price which the aided minority institutions have to pay to obtain aid from the Government. [272G 273A] 2.1 From the decided cases, it is clear, that there is a general and broad consensus about the content and dimen sion of the Fundamental Right guaranteed by Article 30(1) of the Constitution. The right guaranteed to religious and linguistic minorities by Article 30(1) is two fold, to establish and to administer educational institutions of their choice. The key to the Article lies in the words "of their own choice". These words indicate that the extent of the right is to be determined, not with reference to any concept of State necessity and general societal interest but with reference to the educational institutions themselves, that is, with reference to the goal of making the institu tions "effective vehicles of education for the minority community or other persons who resort to them". It follows that regulatory measures which are designed towards the achievement of the goal of making the minority educational institutions effective instruments for imparting education cannot be considered to impinge upon the right guaranteed by Article 30(1) of the Constitution. The question in each case is whether the particular mea 241 sure, it in the ultimate analysis, designed to achieve such goal, without of course nullifying any part of the right of management in substantial measure. [267C E] In re Kerala Education Bill, 1957 ; Rev. Sidhajbhai School and Ors., vs State of Bombay and Anr., ; ; State of Kerala etc. vs Mother Provincial etc. ; , ; The Ahmedabad St. Xaviors College Society & Anr., vs State of Gujarat and Anr., ; ; All Saints High School etc., vs The Government of Andhra Pradesh AIR 1960 SC 1042 discussed. 2.2 What was decided by the Supreme Court in In re Kerala Educational Bill, 1957 was that Anglo Indian Schools which were entitled to receive grants under the Constitution and which received no more aid than that to which they were entitled under the Constitution could not be subjected to stringent terms as fresh or additional conditions precedent to enable them to obtain the grant. Such conditions would infringe their rights under Article 337 and violate their rights under Article 30(1). To place an interpretation that any conditions imposed for granting recognition to unaided minority educational institutions would infringe on the right of administration granted to them by Article 30(1) of the Constitution would be subversive of the right guaranteed by Article 30(1) since it would make the extent of the right depend on the receipt or non receipt of aid. If one thing is clear, it is this that the Fundamental Right guaranteed by Article 30(1) cannot be surrendered, wholly or partly, and the authorities cannot make the grant of aid conditional on the surrender of a part of the Fundamental Right. [253D E] 2.3 Sections 8(1), 8(3). 8(4) and 8(5) do not encroach upon any right of minorities to administer their educational institutions. Section 8(2), however does interfere with such right and, therefore, inapplicable to minority institutions section 4 is again innocuous since section 9 which applies to unaided minority schools is virtually on the same lines as section 9. [272F G] 2.4 Section 8(1) merely empowers the Administrator to make rules regulating the minimum qualifications for re cruitment, and the conditions of service of recognised private schools. Section 8(1) is innocuous and in fact section 13 which applies to unaided minority schools is almost on the same lines as section 8(1). Section 8(2) which requires the prior approval of the Director for the dismiss al, removal, reduction in rank or other termination of the services of an employee of 242 a recognised private school is objectionable. Section 8(3) provides for an appeal to the Tribunal constituted under section 11, that is, a Tribunal consisting of a person who has hold office as a District Judge or any equivalent judicial of fice. The appeal is not to any departmental official but to a Tribunal manned by a person who has held off`ice as a District Judge and who is required to exercise his powers not arbitrarily but in the same manner as a court of appeal under the Code of Civil Procedure. The right of appeal itself is confined to a limited class of cases, namely, those of dismissal, removal or reduction in rank and not to every dispute between an employee and the management. The limited right of appeal, the character of the authority constituted to hear the appeal and the manner in which the appellate power is required to be exercised make the provi sion for an appeal perfectly reasonable. [270E G, 271D F] 2.5 Section 8(4) would be inapplicable to minority institutions if it had conferred blanket power on the Direc tor to grant or withhold prior approval in every case where a management proposed to suspend an employee but it is not so. The management has the right to order immediate suspen sion of an employee in case of gross misconduct but in order to prevent an abuse of power by the management a safeguard is provided to the employee that approval should be obtained within 15 days. The Director is also bound to accord his approval if there are adequate and reasonable grounds for such suspension. The provisions is eminently reasonable and sound. [271H 272B] The Ahmedabad St. Xaviers College Society & Anr. vs State of Gujarat and Anr. , ; ; All Saints High School etc. vs The Government of Andhra Pradesh AIR 1960 SC 1042 referred to. 2.6 The excellence of the instruction provided by an institution would depend directly on the excellence of the teaching staff, and in turn, that would depend on the quali ty and the contentment of the teacher. Conditions of service pertaining to minimum qualifications of teachers, their salaries, allowances and other conditions of service which ensure security, contentment and decent living standards to teachers and which will consequently enable them to render better service to the institution and the pupils cannot surely be said to he violative of the fundamental right guaranteed by Article 30(1) of the Constitution. The manage ment of a minority Educational institution cannot be permit ted under the guise of the fundamental right guaranteed by Article 30(1) of the Constitution, to oppress or exploit its employees any more than any other private employee. Oppres sion or exploitation of the teaching staff of an educational institution is bound 243 to lead, inevitably, to discontent and deterioration of the standard of instruction imparted in the institution affect ing adversely the object of making the institution an effec tive vehicle of education for the minority community or other persons who resort to it. The management of minority institution cannot complain of invasion of the fundamental right to administer the institution when it denies the very object of Article 30(1) which is to make the institution an effective vehicle of education. Therefore, section 10 of the Delhi Education Act which requires that the scales of pay and allowances, medical facilities, pension, gratuity, provident fund and other prescribed benefits of the employ ees of a recognised private school shall not be less than those of the employees of the corresponding status in schools run by the appropriate authority and which further prescribes the procedure for enforcement of the requirement is a permissible regulation aimed at attracting competent staff and consequently at the excellence of the educational institution. It is a permissible regulation which in no way detracts from the fundamental right guaranteed by Article 30(1) to the minority institution to administer their educa tional institutions. Therefore to the extent that section 12 makes section 10 inapplicable to unaided minority institu tions, it is clearly discriminatory. [269B E, 270C D] The Ahmedabad St. Xaviers College Society & Anr., vs The State of Gujarat & Anr., ; ; In re Kerala Education Bill, 1957, ; The State of Kerala vs Mother Provincial ; ; All Saints High School vs Government of Andhra Pradesh AIR 1960 SC 1042 relied on.

Civil Appeals Nos. 356 and 357 of 1961. Appeals by special leave and certificate from the judgment and orders dated October 16, 1959, and February 16,1960, of the Madhya Pradesh High Court in L. P. A. No. 93 of 1957 and Misc. Petition No. 254 of 1959 respectively. 152 section T. Desai and N. H. Hingorani, for the appellant. M. R. Nambiar, section N. Andley, Rameshwar Nath and P. L. Vohra, for respondent No. 1. 1960. October 20. The Judgment of the Court was delivered by HIDAYATULLAH, J. These two appeals by special leave have been filed by the Municipal Committee, Raipur, against two different respondents who carry on business of extraction of oil from oil seeds. The case involves an interpretation of the Byelaws of the Municipal Committee and the determination of octroi duty which was payable by the respondents in the relevant years of assessment on sarso oil seeds brought by them within the area of the appellant Committee for purposes of their business. The Municipal Committee demanded an ad valorem octroi duty Rs. 4 11 0 per cent from the respondents, claiming to levy it under item 44 of the Schedule of goods liable to octroi duty in the Raipur Municipality, appended to the Rules framed on June 4, 1951. The respondents, on the other hand contended that a duty of 2 annas per maund was leviable under item 4 of the same Schedule, which covered the case of oil seeds. The respondents made representations described as appeals, but were unsuccessful. Their demand for refund of octroi duty paid by them was refused and they, therefore, filed petitions under article 226 of the Constitution in the High Court of Nagpur (later, of Madhya Pradesh) against the appellants alleging inter alia that this imposition of octroi duty ad valorem at Rs. 4 11 0 percent on sarso oil seeds as against other oil seeds was ultra vires the Municipal Committee under article 14 of the Constitution. They also averred that octroi duty was properly leviable under item 4 and not under item 44. In the High Court, the petition out of which Civil Appeal No. 356 of 1961 arises, was heard by a learned single Judge, who held that 153 sarso oil seeds were chargeable to duty under item 44 and not under item 4. From the order of the learned single Judge, it does appear that the constitutional question was urged before him. Against this order, a Letters Patent Appeal was filed, and the Divisional Bench, which heard the appeal, held, disagreeing with the learned single Judge, that duty was properly leviable only under item 4. Before the Divisional Bench also, it does not appear that the constitutional question was argued. The petition, out of which Civil Appeal No. 357 of 1961 arises was heard by a Divisional Bench, which, following the earlier decision, decided against the appellant Committee. The entries in the Schedule of goods liable to octroi duty in the Raipur Municipality contain eight classes of goods. Under them are grouped 67 items, the serial numbers running consecutively through all the classes. Class I is headed "Articles of food or drink or use for men or animals". Item 4, which is in that Class reads "Oil seeds of every description not specifically mentioned elsewhere". Class V is headed "Drugs, spices and gums, toilet requisites and perfumes", and item 44 reads "Betel nuts, gums, spices, Indian herbs and Indian raw medicines and drugs, such as nuts, ilaichi, laung, jaiphal, jaipatri, dalchini., sont, katha, zeera, Dhania garlic, dry chillies, pepper, shahzeera, maithi, sarso, etc. and known as kirana" (groceries). Item 4 is chargeable to a duty of 2 annas per maund, and item 44 is chargeable ad valorem at Rs. 4 11 0 per cent. In addition to these entries, there is item 17, which reads "Vegetable oils (not hydrogenated) not provided elsewhere such as Tilli Tel, Sarso Tel, Alsi Tel, Falli Tel, Narial Tel, Andi Tel ', which are chargeable to a duty of 4 annas per maund. It is conceded on all hands that sarso is an oil seed, and if there was nothing more in the Schedule a duty of 2 annas per maund would be leviable on sarso as an oil seed. The dispute arises, because 154 sarso is mentioned again in Item 44 with a very much higher duty, and it is contended by the appellant Committee that the words "not specifically mentioned elsewhere" in item 4 exclude sarso from that item, and that its specific mention in item 44 makes it liable to the higher duty indicated there. The learned single Judge of the High Court held in favour of the Municipality. According to him, this reason was sound and the higher duty demanded was the proper duty payable. The Divisional Bench on the other hand, points out that the two classes (I and V) are entirely different. Class 1 deals with articles of food or drink for use for men and animals while Class V deals with drugs, spices and gums, toilet requisites and perfumes. The division indicates clearly that goods belonging to one category are not included in the goods belonging to the other. The Divisional Bench also points out that item 4 must be read as it stood and the specific mention must be in the same manner in which that entry was framed. Item 4 deals with "oil seeds", and the specific mention must be as "oil seeds" elsewhere in the Schedule. It was also argued for the respondents that "elsewhere" meant elsewhere in the same Class. But the appellant Committee pointed out that the serial numbers were all consecutive, and that the specific mention could be anywhere in the Schedule. The two arguments are equally plausible, and nothing much, therefore turns upon them. In our opinion, the Divisional Bench of the High Court was right when it said that the specific mention elsewhere must be as oil seeds and not as something else. Class V deals with spices and groceries and the concluding words of item 44 known as "kirana" determine the ambit of that item. Though sarso might be mentioned there, it must be taken to have been mentioned as a spice or as kirana and not as oil seed. The extent of item 4, which deals with oil seeds of every descrip 155 tion, could only be cut down by a specific mention elsewhere of an item as an oil seed. Item 44 contains fairly long list, out of which we have quoted a few illustrative items. Each of these items is referable to the general heading either as a drug or a spice or gum, etc. Sarso, it is admitted, is sold as kirana and as a spice. The mention of sarso there is limited by the general heading to which it belongs, namely, a spice, drug or herb sold as kirana. No doubt, sarso as an oil seed is the same article as sarso sold as kirana but we must take into account the intention behind the bye law and give effect to it. If it was intended that sarso as an oil seed was to be taxed in a special way, it would be reasonable to expect that it would have be found a specific in mention as an oil seed with a different duty. One would not expect that it would be included in a long list of articles of kirana and in this indirect way be taken out from a very comprehensive entry like item 4, where oil seeds of every description are mentioned. Though the next argument is not conclusive because there is no logic behind a tax, still it is to be noticed that sarso oil (a maund of which, as the affidavit of the respondents shows, is expressed from three maunds of oil seed) bears only an octroi duty of 4 annas per maund, while three maunds of sarso oil seed under item 44, if it were applicable, bear a duty of Rs. 4 3 6 per maund, if the price of sarso is taken as Rs. 30 per maund as stated in the affidavit. This leads to an anomaly, which, in our opinion, could hot have been intended. Finally, it may be said that if there be any doubt, the Divisional Bench of the High Court very properly resolved it in favour of the taxpayer. We, therefore, hold that the judgment of the High Court is correct, and dismiss these appeals with costs. Appeals dismissed,.

The respondents carried on business of extraction of oil from oil seeds. The appellant Municipality charged octroi duty at Rs. 4 11 0 percent ad valorem under item 44 of the schedule of goods attached to the Rules framed by the Municipality. The respondent 's case was that they were liable to pay octroi under item 4 of the said Rules at the rate of 2 as. per maund. The schedule consisted of eight classes with 67 items of goods, the serial number running consecutively. Class I was headed "Articles of food or drink or use for men or animals". Item 4, which was in that class, read "oil seeds every description not specifically mentioned else where". Class V was headed "Drugs, spices and gums, toilet requisites and perfumes" and item 44 which was in that class read "betel nuts, gums, spices, sarso etc. and known as kirana" (groceries). 'I`he single Judge who heard the matter in the first instance held in favour of the appellant but the court of appeal held in favour of the respondent. ^ Held, that the view taken by the Court of appeal must be upheld. The words not specifically mentioned elsewhere" in item 4 of the Schedule must mean mention as an oil seed. The words "known as Kirana" in item 44 clearly indicated that sarso fell within its ambit only as a spice or as Kirana and not as an oil seed. Although there could be no doubt that sarso as an oil seed was the same thing as Kirana, but the intention behind the bye law to charge oil seeds at a lesser rate was clear and must be given effect to.

ivil Appeal No. 3544 of 1989. From the Judgment and Order No. 131/89 D dated 9.5. 1989 of the Central Excises & Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/1176/88 D. Rajiv Dutta, Nimish Kothare and K.K. Patel for the Appel lant. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is an appeal under section 35L of the Central Excise & Salt Act, 1944 (hereinafter referred to as 'the Act '). The appellant is a manufacturer of various types of food products known as Sapaghetti, Macaroni, Vermicelli, etc., falling under Heading No. 1902.10 of the Central Excise Tariff Act. The appellant filed classification list effec tive from 1st March, 1987 claiming that their pre budget stocks of non excisable goods, namely, various types of food products declared in the classification list as aforesaid were entitled to duty free clearance being pre budget stocks. The Assistant Collector of Central Excise, however, held that the question of clearing pre budget stocks duty free did not arise because the products in question were excisable though exempted from the duty. There was an appeal from the said order of the Assistant Collector before the Collector of Central Excise (Appeals), Bombay. He dismissed the appeal. The appellant went up in appeal before the Tribunal. It was contended before the Tribunal on behalf of the appellant that the goods in question were not leviable to duty under the aforesaid head until 28th February, 1987 and the said goods had been made dutiable only by the 313 Finance Bill, 1987 88 with effect from 1st March, 1987. It was submitted further that on 27th February, 1987, the appellant had in their factory a stock of the said product which were fully manufactured, packed and ready for sale and the inventory of the said stock was prepared by the Supdt. of Central Excise on 1st March, 1987. Reliance was placed on several decisions of the different High Courts, namely, decision of the Madhya Pradesh High Court in Kirloskar Brothers Ltd. vs Union of India, ; Union of India vs Kirloskar Brothers Ltd., , decision of the Bombay High Court in Synthetic Chemicals Pvt. Ltd. vs S.C. Coutinho, , decision of the Bombay High Court in New Chemicals Ltd. vs Union of India, decision of the Madras High Court in Sundaram Textiles Ltd. vs Asstt. Collector of Central Excise, , decision of the Allahabad High Court in Union of India vs Delhi Cloth & General Mills, On the other hand, the revenue contended that the goods forming the pre budget stocks were very much excisable goods and that for the purpose of collecting duty, date of manufacture was not material under the scheme of the Act even though the taxable event is the manufacture. It was, therefore, contended that at the time of manufacture of the goods in question, the goods were excisable goods and in view of rule 9A of the Central Excise Rules, 1944, though the taxable event is the manufacture and production, the payment of duty is related to and postponed to the date of removal of articles from the manufactury. The Tribunal accepted the said contention. We are of the opinion that the Tribunal was right. It is well settled by the scheme of the Act as clarified by sever al decisions that even though the taxable event is the manufacture or production of an excisable article, the duty can be levied and collected at a later stage for administra tive convenience. The Scheme of the said Act read with the relevant rules framed under the Act particularly rule 9A of the said rules, reveals that the taxable event is the fact of manufacture or production of an excisable article, the payment of duty is related to the date of removal of such article from the factory. In that view of the matter, the Tribunal dismissed the appeal and rejected the assessee 's contention. Appearing before us in support of the appeal, Mr. Rajiv Dutta, learned counsel for the appellant contended that in several decisions it has been held, and referred us to the said decisions referred to hereinbefore, that the relevant date would be the date of manufacture and in this case the manufacture was complete before the introduction of the budget. It was submitted that until 28th February, 1987, when, 314 according to Shri Dutta, the goods had been manufactured, the goods in question were unconditionally exempt from the duty. Under the Finance Bill, 1987 88, the said products were made dutiable at the rate of 15% ad valorem on or from 1st March, 1987. But the appellant had in their factory, a stock of the said products which were duly manufactured, according to Shri Dutta, packed and ready for sale prior to 28th February, 1987. In those circumstances, the goods in question, according to Shri Dutta, would not be subjected to duty at 15% ad valorem. Having considered the facts and the circumstances of the case, we are unable to accept this submission. Excise is a duty on manufacture or production. But the realisation of the duty may be postponed for admin istrative convenience to the date of removal of goods from the factory. Rule 9A of the said rules merely does that. That is the scheme of the Act. It does not, in our opinion, make removal be the taxable event. The taxable event is the manufacture. But the liability to pay the duty is postponed till the time of removal under rule 9A of the said Rules. In this connection, reference may be made to the decision of the Karnataka High Court in Karnataka Cement Pipe Factory vs Supdt. of Central Excise, 13, where it was decided that the words 'as being subject to a duty of ex cise ' appearing in section 2(d) of the Act are only descriptive of the goods and not to the actual levy. 'Excisable goods", it was held, do not become non excisable goods merely by the reason of the exemption given under a notification. This view was also taken by the Madras High Court in Tamil Nadu (Madras State) Handlook Weavers Cooperative Society Ltd. vs Assistant Collector of Central Excise, [1978] ELT J 57. On the basis of rule 9A of the said rules, the central excise authorities were within the competence to apply the rate prevailing on the date of removal. We are of the opinion that even though the taxable event is the manufacture or the production of an excisable article, the duty can be levied and collected at a later date for administrative conven ience. Having regard to the facts and the circumstances of this case and having regard to the scheme of the excise law, we are of the opinion that the Tribunal was right and there are no grounds to assail the order of the Tribunal. In the aforesaid view of the matter, the appeal must fail and, accordingly, is dismissed. there will, however, be no order as to costs. R.S.S. Appeal dis missed.

The appellant is a manufacturer of various types of food products known as Sapaghetti, Macaroni, Vermicelli, etc., failing under Heading No. 1902.10 of the Central Excise Tariff Act. The said goods had been made dutiable only by the Finance Bill 1987 88 with effect from Ist March, 1987. The appellant claimed that their pre budget stocks of fully manufactured non excisable goods were entitled to duty free clearance. The Assistant Collector of Central Excise, the Collector of Central Excise (Appeals) and the Tribunal rejected the claim of the appellant. Before this Court it was contended on behalf of the appellant that the relevant date would be the date of manu facture and in this case the manufacture was complete before the introduction of the budget. Dismissing the appeal, this Court, HELD: (1) Excise is a duty on manufacture or production. But the realisation of the duty may be postponed for admin istrative convenience to the date of removal of goods from the factory. Rule 9A of the Central Excise Rules merely does that. [314C] (2) The scheme of the Act read with the relevant rules framed under the Act, particularly rule 9A, reveals that the taxable even is the fact of manufacture or production of an excisable article, the 312 payment of duty is related to the date of removal of such article from the factory. [313F] (3) On the basis of rule 9A of the Central Excise Rules, the Central Excise authorities were within the competence to apply the rate prevailing on the date of removal. [314E] Karnataka Cement Pipe Factory vs Supdt. of Central Excise, and Tamil Nadu (Madras State) Handloom Weavers Co operative Society Ltd. vs Assistant Collector of Central Excise, [1978] ELT J. 57, referred to.

Appeal No.110 of 1961. Appeal by special leave from the judgment and order dated October 14, 1960, of the Allahabad High Court in First Appeal from Order No. 41 of 1959. C. B. Agarwala, Rameshwar Nath, section N. Andley, J. B. Dadachanj and P. L. Vohra, for the appellant. K. B. Choudhuri, A. K. Kirty and Ratna Rao, for respondent No. 1. 870 section P. Sinha and M. I. Khawaja, for respondents Nos. 2, 3 and 4. H. N. Sanyal, Additional Solicitor General of India and G. C. Mathur, for respondent No. 5. Naunit Lal, for respondent No. 7. 1961. April 11. The, Judgment of the Court was delivered by SUBBA RAO, J. This appeal by special leave is directed against the judgment dated October 14, 1960, of the High Court of Judicature at Allahabad confirming the order passed by the Civil Judge, Agra, directing the Official Receiver to take possession of the property of the appellant. This case illustrates how the enforcement of an interlocutory order appointing a Receiver made in the interest of all the parties concerned could be obstructed and the object of the order itself be defeated by dilatory tactics adopted by one party or other. At Agra, there were three spinning mills and one flour mill, all of which together were described as the Johns Mills; and, originally, the John family or their predecessors were the owners of all these mills. At the time the present proceedings were initiated, other persons had acquired interest therein. The following persons were the joint owners of the mills: (1) Hiralal Patni, the appellant, and Munni Lal Mehrt. 19/40th share; (2) Gambhirmal Pandiya Private Ltd. 8/40th share; (3) Messrs. John & Co . 11/40th share; and (4) I.E. John . 2/40th share. Seth Loonkaran Sethiya, respondent No. 1, advanced large amounts to Messrs. John & Co. on the security of its business assets and stocks. On April 18, 1949, the said Sethiya filed 0. section No. 76 of 1949 in the Court of the Civil Judge, Agra, against John & Co. for the recovery of the amount due to him by sale of the assets of the said company. To that suit the partners of Messrs. John & Co., for convenience described as "defendants 1st set", and the partners of Messrs. Johns Jain & Co., who were for convenience described as "defendants 2nd set", were made parties. Pending the suit, the said Sethiya filed an application, under O. XL, r. 1, Code of Civil 871 Procedure, for the appointment of a Receiver. By an order dated May 21, 1949, the learned Civil Judge appointed two joint Receivers and directed them to run the three spinning mills. Hiralal Patni filed an appeal against that order to the High Court at Allahabad, and the said Court by its order dated August 22, 1949, modified the order of the Civil Judge confining the order of appointment of Receivers only to the share of Messrs. John & Co. in John Jain Mehre & Co. Loonkaran Sethiya made another application in the Court, of the Civil Judge for the appointment of a Receiver for the property of Hiralal Patni and the learned Civil Judge by his order dated December 1, 1951, directed the Receivens to take possession of the appellant 's share in the mills also Against this order an appeal was preferred to the High Court and the operation of the said order was stayed pending the disposal of the appeal. On April 5, 1954, the Civil Judge passed a preliminary decree against the defendants therein directing them to deposit the decree 'amount in court within the prescribed time, and in default the plaintiff was given a right to apply for a final decree for sale of the business assets of the defendants. The decree also gave a right to apply for a personal decree in case the sale proceeds were not sufficient to discharge the decree. The preliminary decree directed that the Receivers should continue on the property until discharged. Hiralal Patni preferred a appeal to the High Court against the said preliminary decree and applied for interim stay of its operation. On August 23, 1955, the High Court discharged the Receiver,,; appointed by the learned. Civil Judge, and appointed another Receiver in their place. On March 25, 1955, the learned Civil Judge prepared a scheme for running the mills, and the parties preferred appeals against that scheme to the High Court. The said appeals were compromised and under the term , of the compromise the parties agreed to take different mills on lease for a period of three years from the Receiver. On January 14, 1956, the Receiver executed a lease in respect of the flour mill in favour of Hiralal Patni for a 872 period of three years. Under the lease deed it was agreed that he should deliver the demised premises to the Receiver upon the expiry of the term. In due course, on March 14, 1956, a final decree was made in the suit for the sale of the properties, but the final decree was silent in regard to the Receiver appointed earlier. On September 29, 1958, Hiralal Patni applied to the High Court for extension of the lease by three years. On January 16, 1959, the High, Court rejected the application on the ground that the lease was only a stopgap arrangement and that it was for the Receiver to make a fresh arrangement for the future under the supervision and directions of the Civil Judge, Agra. On January 17, 1959, the Receiver applied to the Civil Judge for instructions whether he should proceed at once to dispossess the appellant. On notice, Hiralal Patni raised various objections and claimed that he was entitled to remain in possession of the property as its owner. The learned Civil Judge disallowed his objections and held that the Receiver derived his authority from the preliminary decree, and directed the Receiver to lease out the said flour mill by auction for a period of two years. Pursuant to that order, an auction was held, and the appellant was the highest bidder, and he paid the lease amount and executed a formal lease deed. Not satisfied with the order of the Civil Judge, Hiralal Patni preferred an appeal to the High Court. The High Court in an elaborate judgment considered the contentions raised on behalf of Hiralal Patni and dismissed the appeal. Hence the present appeal. Learned counsel for the appellant raised before us the following three contentions, which the appellant, unsuccessfully raised before the High Court as well as before the Civil Judge. (1) On a true construction of the relevant orders the Receiver has no power to dispossess the appellant in such a way as to prevent him from working his flour mill. (2) After the passing of the final decree, though the Receiver may continue for the purpose of accounting and discharge of debts, he cannot exercise any powers in respect of the rights of the parties. And (3) in any view, as the appellant 873 acquired a right under a lease deed and continued in possession after its expiry, he could be dispossessed only by a suit and not by a summary procedure. The first question turns upon the construction of the relevant orders. The Civil Judge appointed two joint Receivers by an order dated May 21, 1949. It it not necessary to consider the said order as the final order that governed the rights of the Receiver and the parties was that made by the High Court on appeal on August 22, 1949. After considering the contentions of the parties, the High Court came to the conclusion that a Receiver should be appointed to be in charge of the entire property, immoveable and move. able, of the defendants 1st set for its protection and preservation. The order of the High Court described the John family as defendants 1st set to the suit, and defendant 5, Hiralal Patni, defendant 6, Munnilal Mehra, and Messrs. John Jain Mehra & Co. as defendants 2nd set. This order was confined only to the properties of defendants 1st set. The High Court further proceeded to state: "In the finance agreement in plaintiffs favour, the plaintiff was not given any right to enter into possession on non payment or to run the mills. There being no right given to the plaintiff to enter into possession and manage the mills or to have a receiver appointed, a receiver can be appointed only under Order 40, rule 1 of the Code of Civil Procedure. " Adverting to the contention raised by the defendants that a Receiver could not be appointed to run the mills, the High Court observed: "In view of the order that we propose to pass today we do not want to go into that question. In case the mills are not run under the order of the Collector under the United Provinces Industrial Disputes Act, or by the partners we propose to give the parties permission to move this court. In case we decide to appoint a receiver to run the mills we shall then consider whether a receiver can or cannot be appointed for the purpose of running the mills. " Then the High Court stated: 110 874 "We have already set out the circumstances which in our opinion make it necessary that a receiver should be appointed to take charge of the property of defendants first set whether under the finance agreement of July 1948 there was a charge created on the property, moveable and immoveable, or not. The Receiver will not interfere with the running of the mills except under express orders of the Court and to the extent when it becomes necessary by reason of the value of the security being jeopardized by any action of the defendants. " Then the High Court pointed out that the Collector had the power under section 3 of the Industrial Disputes Act to make arrangements for the running of the mills. Finally the High Court observed: , "It may be necessary from time to time to give directions to the receiver. The parties may also want portions 'of this order to be clarified or other directions obtained. The lower court may give such directions to the receiver or to the parties as it may consider just and proper. In case further directions are necessary or the receiver or the parties are not satisfied with the directions given they may move this court for further direction. " Shortly stated, the High Court confirmed the order of the Civil Judge appointing the Receivers and directed them to take charge of the properties of defendants 1st set. The High Court expressly prohibited the Receivers from interfering with the running of the mills except under express orders of the court, for at that time it did not think it necessary to direct the Receivers to do so. It may be recalled that the Receivers were not appointed for the flour mill of the appellant, Hiralal Patni, as he was one of the defendants belonging to the 2nd set. Learned counsel for the appellant contends that this order did not put the mills in the possession of the Receivers and that the Receivers were given only a supervisory control over the share of the defendants 1st set in the mills. Whatever terminology may have been used, the fact remains that the Receivers were put in charge of the entire property 875 of defendants 1st set, which includes their share in the mills, though it was equally made clear that the Receivers could not directly run the mills without further directions in that regard. The Civil Judge by his order dated December 1, 1951, directed the Receivers to take possession of 'the share of defendants 2nd set also. The operative portion of that order reads: "For all these reasons I have come to the conclusion that it is just and convenient that a receiver should be appointed over the share of the defendant 11 set, and I order that the present receivers who are in possession of the defendant 1st set share should also be appointed receivers over the share of the defendant 11 set. As for the prayer allowing the receivers to run the mills the question of running of the mills is already before the High Court as is shown by the compromise dated 8th September 1950. It is not known what has happened after this compromise. The receivers are directed to seek the direction of the Hon 'ble High Court on the question of the running of the mills so that there may be no chance of conflicting of orders passed by this court and the Hon 'ble High Court, on this matter. The receivers will not interfere with the running of the mills except under express orders of this court and to the extent when it becomes necessary by reason of the value of the security being jeopardized by any action of the persons running the Mills. The receivers are appointed over the share of the defendants II set only, for the purpose of preservation and protection and realization of the rent." This order runs on the same lines indicated by the High Court in its earlier order in respect of the share of defendants 1st set. What is to be noted is that under this order the Receivers were prohibited from ' running the mills except under the specific ' orders of the said court or of the High Court. On April 5, 1954, a preliminary decree was made in the suit, and under that decree the defendants were directed to deposit a sum of Rs. 18,00,152 in court within the prescribed 876 date and in default the plaintiff was given a right, to apply for a final decree for the sale of the assets of the spinning mills. There was a further direction that in case the nett sale proceeds of the said property were found insufficient to satisfy the plaintiffs claim, the plaintiff would get a personal decree against defendants 1st set and defendants 2nd set for the balance of his claim. The Receivers were directed to continue on the property until discharged. Under the preliminary decree, the plaintiff became entitled not only to the sale of the assets of the spinning mills but also to a personal decree against all the defendants for recovering any balance that might still be due to him after the sale of the said properties. What is more, the Receivers were expressly directed to continue till they were discharged, and as the decree did not specify the powers of the Receivers, it must be held that they continued to exercise such powers as they had under the previous, orders of the courts dated August 22, 1949 and December 1, 1951. On March 25, 1955, the learned Civil Judge, Agra, prepared a scheme for the running of the three spinning mills, and the parties preferred two appeals to the High Court against the scheme. On July 22, 1955, a compromise was effected between the parties in the aid two appeals and the appeals were disposed of in terms of the compromise by order of the High Court dated August 23, 1955. As the terms of this order are rather important in the context of the contentions raised before us, we would read the relevant portions hereof: Clause 1. That the aforesaid parties have without prejudice to their rights and litigation between them have after deliberate consideration and as a special effort to make arrangements for running the Johns Mill have decided that the three spinning Mills and Flour Mill situate in Agra should be run by the parties in accordance with the terms and conditions set forth below. (vi) That the lease shall be granted by the receiver on terms and conditions approved by the Court. 877 (ix) If any lessee shall fail to run the Mill after delivery of possession or pay the lease money or fail to carry out the arrangements arrived at between the parties for a period of three months, the receiver shall take possession of the Mills and with the per mission of the court shall lease out that particular mill to any of the parties excepting the party in default who may offer the highest bid in accordance with the orders passed by the Civil Judge in this matter. Clause, 4. . . . . . The arrangement embodied in this document is only for the purpose of working the mills by the petitioners. Nothing contained in this document will affect the rights and obligation of the parties which are or may be the subject matter of suit No. 76 of 1949 or in any litigation between the parties and notwithstanding anything contained herein but subject :however to the express provision in the preceding paragraph of this clause it will be open to the petitioners to seek their remedies in any manner provided by law, and without prejudice to the rights of the parties to obtain a stay order from the Hon 'ble High Court or any other Court. " What is the effect of this order? Learned counsel for the appellant contends that this order embodies an internal arrangement between the defendants for running the mills and that it does not in any way enlarge the scope of the orders dated August 22, 1949, and December 1, 1951, under which the Receivers were appointed. We do not think that the scope of the orders is so limited. The combined effect of the said earlier orders was that the Receivers should take possession of the entire properties of the two sets of defendants. But the Receivers were not given the power to run the mills without specific directions to that effect by the court. The Civil Judge by his order dated March 25, 1955, evolved a scheme for running the mills, and by that order he laid down the conditions and directed the Receivers to advertise calling for applications from persons, including the Govern ment, who were willing to run the mills. This order 878 was only confined to the three spinning mills. The compromise order in the appeals covered also the flour mill. Though different mills were to be run by different defendants by obtaining lease deeds, that was only a mode evolved for running the mills tinder the supervision of the court. Under the compromise, the leases were to be executed in favour of the Receiver. It also provided that in case the lessees did not carry out the terms of the lease, the Receiver should take possession of the mill in respect of which default was committed and, with the permission of the court, should lease out the mill to any of the defendants other than the defaulting party. The clauses saving the rights of the parties obviously refer to their rights which were the subject matter of the suit and they could not have any reference to the terms agreed upon under the compromise order. Under the compromise order, the courts, though by consent, gave directions for running the mills which they left out for future consideration in their earlier orders. The result, was that under the earlier orders, all the properties of the defendants were put in possession of the Receivers, and under the compromise order, the Receiver was directed to run the mills under the agreed scheme. Pursuant to the terms of the compromise order, on January 14, 1956, the Receiver executed a lease in favour of the appellant in respect of the flour mill for a period of three years, and under that lease deed the appellant got possession from the Receiver and agreed "To yield up all the demised premises with all fixture, improvement and replacements thereto in good and tenantable repair and condition in accordance with the lease covenants in that behalf herein contained upon the expiry of the term hereby created or the sooner determination of these presents as herein provided. " Whatever ambiguity there may have been, this lease deed dispels it, for under the lease deed the appellant admits the legal possession of the Receiver, takes a lease under him, and agrees to put him back in possession after the expiry of the lease. On September 29, 1958, the appellant again applied to the court for extension of the lease for three more years, thereby 879 accepting his possession under the Receiver, though the court on January 16,1959, dismissed that application on the ground that the lease was only a stopgap arrangement and that it was for the Receiver to make a fresh arrangement for the future under the supervision and directions of the Civil Judge under whose preliminary decree he derived authority. It is manifest from the aforesaid orders that the Receiver was put in possession of the entire property of the defen dants, that he was not empowered to run the mills personally, that by subsequent orders he was directed to lease out the mills to the parties in the manner prescribed and that under the final order he was to take over possession and make other arrangements for running the mills. In the premises, we find it very difficult to accept the argument of learned counsel that the Receiver was not put in possession of the mills, but the mills continued to be in the possession of tile defendants. We hold on a construction of the relevant orders that the flour mill of the appellant was also put in the possession of the Receiver and that the appellant was running the said mill under the compromise formula. The second contention of learned counsel for the appellant is that the Receiver appointed in the suit ceased to be a Receiver qua the rights of the parties when the final decree was made by the Court. This contention leads us to the consideration of the question whether a Receiver appointed in a suit ceases to be such automatically on the termination of the suit. Neither section 51(d) nor Order XL of the Code of Civil Procedure prescribes for the termination of the office of receivership. We must, therefore, look for the solution elsewhere. Some of the authoritative text books on receivers may usefully be consulted in this connection. In Halsbury 's Laws of England, 3rd edn., Vol. 32 (Lord Simonds), at p. 386 under the heading "Duration of appointment by court", the following statement occurs: "When a receiver is appointed for a limited time, as in the case of interim orders, his office determines on the expiration of that time without any 880 further order of the court, and if the appointment is until judgment or further order ' it is brought to an end by the judgment in the action. The judgment may provide for the continuance of the receiver, but this is regarded as a now appointment. If a further order of the court, though silent as to the receivership, is inconsistent with a continuance of the receiver, it may operate as a discharge. When a receiver has been appointed on an interlocutory application without any limit of time, it is not necessary to provide for the continuance of his appointment in the final judgment. The silence of the judgment does not operate as a discharge of the receiver or determination of his powers. So, also the appointment of a receiver generally by the judgment in an administration action need not be continued by the order on further consideration. " In Kerr on Receivers, 12th edn., in chapter XII under the heading "Discharge of a Receiver", the legal position is explained thus: "The appointment of a receiver made previously to the judgment in an action will not be superseded by it, unless the receiver is appointed only until judgment or further order." In High on the Law of Receivers, 4th edn., the following observations appear at p. 985: , "The functions of a receiver usually terminate with the termination of the litigation in which he was appointed. And when the bill upon which the appointment was made is afterwards dismissed upon demurrer, the duties of the receiver cease as between the parties to the action. . . And although as between the parties to the litigation his functions have terminated with the determination of the suit, he is still amenable to the court as its officer until he has complied with its directions as to th e disposal of the funds which he has received during the course of his receivership. . . But an order of discharge does not necessarily follow, in all. cases, because of the determination of the suit, and the court may, upon sufficient cause shown, 881 either discharge or continue the receiver, according to the exigencies of the case. " The learned author makes a further distinction at p. 986 between the following two classes of cases: "Since the final decree in the cause is generally decisive of the subject matter in controversy, and determines the right to the possession of the fund or property held by the receiver, it is usually the case that such decree supersedes the functions of the receiver, since there is then nothing further for him to act upon, although it would seem to be still necessary that a formal application be made for his discharge. But when the court by its decree does not attempt to decide the main question in controversy, and leaves the receiver 's possession undisturbed, it cannot be held to have the effect of operating as a discharge, or of superseding his functions. " Woodroffe in "The Law relating to Receivers in British India", 4th edn., states at p. 22 thus: O. XL, r. 1(a) now expressly provides that a receiver may be appointed whether before or after decree. As long as the order appointing a receiver remains unreversed, and as long as the suit remains a lis pendens, the functions of the receiver continue, until he is discharged by order of the Court. " The law may briefly be stated thus: (1) If a receiver is appointed in a suit until judgment, the appointment is brought to an end by the judgment in /the action. (2) If a receiver is appointed in a suit, with. out his tenure being expressly defined, he will continue to be receiver till he is discharged. (3) But, after the final disposal of the suit as between the parties to the litigation, the receiver 's functions are usually terminated, he would still be answerable to the court as its officer till he is finally discharged. (4) The court has ample power to continue the receiver even after the final decree if the exigencies of the case so require. Let us now apply the said principles to the facts of the instant case. The order appointing the Receivers III 882 did not expressly state that the Receivers ' term would expire on the termination of the suit. Under the preliminary decree the plaintiff became entitled to apply for the passing of the final decree for the sale of the property charged and also to get a personal decree against the defendants 1st set and 2nd set for the balance of his claim remaining due after the sale The preliminary decree expressly directed the Receivers to continue until discharged. Pursuant to the preliminary decree, a final decree for sale of the said properties was made, but the said decree did not in any way modify the direction given in the preliminary decree in respect of the Receivers. The combined effect of the two decrees is that the final decree did not terminate the suit, for the plaintiff would still be entitled to get a personal decree in case the sale proceeds were not sufficient to pay off his dues. It cannot, therefore, be said that the suit has be finally an disposed of. That apart, the preliminary decree in express terms directed the Receivers to continue till they were discharged. In the circumstances, we are definitely of the opinion that the Receivers continued by the preliminary decree are entitled to function in that capacity till they are discharged. The third contention of learned counsel for the appellant raises the question whether in the circumstances of this case the Receiver could recover possession from the appellant only by instituting a regular suit against him for eviction. The facts germane to this contention may be briefly recapitulated. On January 14, 1956, the appellant executed a lease deed in respect of the flour mill in favour of the Receiver and there was an express recital therein that the lessee would deliver possession to the Receiver of all the demised premises upon the expiry of the term of lease. The said lease was executed as a part of a com promise scheme for running the mills. The term of the lease had expired. Thereafter the court directed the Receiver to take possession of the property and auction the same to the highest bidder. The question is whether under the circumstances a court can dispossess the appellant under, a summary process or 883 whether it could only do so by directing the Receiver to file a suit for eviction. The material provisions of Order XL of the Code of Civil Procedure read: Rule 1. (1) Where it appears to the Court to be just and convenient, the Court may by order . . . . . . (b) remove any person from the possession or custody of the property; . . . . . . (d) confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof (2) Nothing in this rule shall authorize the Court to remove from the possession or custody of property any person whom any party to the suit has not a present right so to remove. Under this Order, a receiver is an officer or represen tative of the court and he functions under its directions. The court may, for the purpose of enabling the receiver to take possession and administer the property, by order, remove any person from the possession or custody of the property. Sub r. (2) of rule 1 of the Order limits that power in the case of a person who is not a party to the suit, if the plaintiff has not a present right to remove him. But when a person is a party to the suit, the court can direct the receiver to remove him from the possession of the property even if the plaintiff has not a present right to remove him. In the present case, the appellant was a party to the suit and the court, through the Receiver took possession of the mill and thereafter the Receiver, during the course of the administration of the property, under a compromise arrangement for running the mills, leaned out the flour mill to the appellant with an express condition that the appellant should redeliver the property to the Receiver on the expiry of the lease. Aamittedly the term of the, lease had expired, and the court directed the Receiver to take possession of the mill. The court, in our view, 884 was legally competent to confer a power on the Receiver under Order XL, r. 1(1)(d), of the Code of Civil Procedure to recover the property from the appellant. The decisions cited at the Bar are not of much relevance to the present case. Krista Chandra Ghose vs Krista Sakha Ghose (1) is a case where a lease was granted by a Receiver acting under an order of court and the possession of the property had been given to the lessee, and subsequently certain parties applied to the court for a declaration that the lease was invalid on the ground that it was obtained by collusion. There the court held that no summary order could be passed to set aside the lease and the proper remedy would be by a suit against the Receiver and also against the lessee. In that case the lessee, though he was a party to the suit, acquired a leasehold right under the lease deed and third parties, who offered a higher rent, sought to question the lease on the ground of collusion. Woodroffe, J., held that the dispute could only be decided in a properly instituted suit. The Rajasthan High Court in Nanakchand vs Pannalal (2) held that a Receiver could not recover the rent from a lessee in a summary order of the court, but should file a suit just like any other landlord. The Allahabad High Court in Loonkaran vs I. N. John (3), though it conceded that where a lease had been executed by the Receiver, the lessee may ordinarily be evicted from the demised property only by a regular suit, held that where after the expiry of the term of the lease granted by a Receiver, the sub. lessee in possession gave an undertaking to the court that he would vacate the premises in favour of the prospective lessee if no fresh lease was granted in his favour, the court has power to eject the sub leessee in its summary jurisdiction. The learned Judge observed at p. 59 thus: "By giving an undertaking to the court that he would vacate the Mill in favour of the prospective lessee and by bidding in the court auction the appellant, in our view, submitted himself to the (1) Cal. (2) A.I.R. 1951 Raj. (3) A.I.R. 1961 All. 885 jurisdiction of the court. The appellant could therefore be ejected by summary process, instead of by a suit. " So too, the High Court of Travancore Cochin in Sivarajan vs Official Beceiver, Quilon District (1) held that where the period of the lease granted to the receiver had already expired and as per the express stipulation in the lease deed the lessee was bound to surrender possession of the property without raising any objection at all, the Court could summarily evict him. The learned Judge made the following observations at p. 39: "Even though the lease deed stands in favour of the receiver the express undertaking given by the lessee for an unconditional surrender of the property is in favour of the court. . The summary enforcement of the undertaking thus taken by the court is only a, step towards the discharge of the duties of the court in the management of the estate and it cannot be said that the court has lost its jurisdiction in that direction merely because the property has been in the possession of a lessee. " Further citation would be redundant. These and such decisions seem to hold that a court cannot evict a lessee from a receiver, whether he is a party to the suit or not, in exercise of its summary jurisdiction unless the lease expressly conferred a right of re entry under the lease deed on the receiver. It is not necessary to demarcate the boundaries of the summary jurisdiction of a court in managing an estate through a receiver, for in this case we are clearly of the opinion that the appellant was in possession of the mill under an agreed and integrated scheme for running the mills by the different partners, though he was put in possession under a document described as a lease deed. In effect the Receiver, during the course of the management, entrusted each mill to one of the partners so that the mills might be properly worked under experienced hands. The appellant expressly agreed to put the Receiver in possession of the mill after the expiry of three years. No question of (1) I.L.R. 886 deciding the conflicting claims of a lessee and a third party arises in this case; nor is the court called upon to pronounce on the vested rights of a lessee in conflict with those of the Receiver. But this is a simple case of a court in the course of its administration of the estate through the agency of a receiver making a suitable provision for the running of the mills. As the agreed term had expired, the court, in our view, could certainly direct the appellant to put the mill in the possession of the Receiver. Lastly it has been brought to our notice that an application for the discharge of the Receiver is pending in the lower court. Any observations that we have made in this judgment are not intended to affect the merits one way or other in the disposal of that application. That application will be disposed of in accordance with law. In the result, the appeal fails and is dismissed with costs. Appeal dismissed.

The John Mills comprising of three textile mills and one flour mill were jointly owned by several persons. The financier of the Mills filed a suit for recovery of the amount due to him. During the pendency of the suit a receiver was appointed to take possession of the flour mills but he was not empowered to run the mills directly without further directions of the court. A preliminary decree was passed in the suit directing among other things that the receiver was to continue until discharged. Thereafter, an arrangement was made for running the mills and the court directed that the appellant, who was one of the co owners of the mills, be given a lease of the flour mill for three years by the receiver. In the lease deed the appellant undertook to deliver back possession to the receiver upon the expiry 869 of the three years. Shortly thereafter, a final decree was passed in the suit but it was silent in regard to the receiver appointed earlier. On the expiry of the three year term of the lease the court directed the receiver to take back possession of the flour mill from the appellant. The appellant contended (i) that after, the passing of the final decree the receiver ceased to 'be a receiver in respect of the rights of the co owners and could not dispossess the appellant, and (ii) that the appellant could only be dispossessed by a suit filed by the receiver and not by a summary procedure. Held, that the receiver continued by the preliminary decree was entitled to function till he was discharged. The legal position with regard to the continuance of receivers is that: (i) if a receiver is appointed in a suit until judgment, the appointment is brought to an end by the judgment in the suit; (ii) if a receiver is appointed in a suit without his tenure being expressly defined, he will continue till he is discharged; (iii) even after the final disposal of the suit, though as between the parties to the suit his functions are usually terminated, the receiver con tinues to be answerable to the court till he is finally discharged, and (iv) the court has ample power to continue the receiver even after the final decree if the exigencies of the case so require. The final decree in the present case did not finally dispose of the suit and did not bring the appointment of the receiver to an end. Held, further that the court was entitled to direct the appellant to give back possession of the flour mill to the receiver. The court was merely making suitable arrangement for the running of the mill in the course of its administration of the estate through the receiver. The mill had been leased out to the appellant with an express condition that he should redeliver the property to the receiver on the expiry of the lease and the court was competent under 0. 4o r. 1(1)(d) Code of Civil Procedure to confer a power on the receiver to recover the property from the appellant. It was not necessary for the receiver to file a suit for the recovery of the property.

Civil Appeal No. 1673 of 1982. Appeal by Special leave from the Judgment and order dated the 11th January, 1982 of the Punjab and Haryana High Court in Civil Writ Petition No. 26 of 1982. O.P. Malhotra, and N.S. Das Bahl and Pawan K. Bahl for the Appellant. Shanti Bhushan and V.P. Chaudhary for the Respondent. The Judgment of the Court was delivered by VARADARAJAN, J. This civil appeal by special leave is directed against the judgment delivered by the Division Bench of the Punjab 171 & Haryana High Court on 11.1.1982 dismissing in limine Writ Petition No. 26 of 1982 which had been filed by the appellant Ved Prakash Gupta. The appellant was an employee of the first respondent M/s. Delton Cable India (P) Ltd. Faridabad, Haryana. He was given a charge sheet by the management on 5.8.1979 and dismissed from service on 13.9.1979 after having been found guilty of the charge in the domestic enquiry conducted by the Enquiry officer who has been examined as one of the witnesses on the side of the management before the Labour Court at a later stage. There was a reference of the dispute arising out of the dismissal of the appellant to the Labour Court, Faridabad in Reference No. 143 of 1980 under section 10 (i) (c) of the , hereinafter referred to as the 'Act. ' The Labour Court framed the following issues. (i) Whether the claimant Shri Ved Prakash Gupta was in the position of a workman under the ? If so, to what effect? (ii) Whether the reference is bad in law in view of the objections raised in the written statement? If so, to what effect? (iii) Whether proper and valid domestic enquiry has been . conducted? If so, to what effect? (iv) Whether the termination of the service of the workman is proper, justified and in order? If not, to what relief is he entitled? Issues 1 and 2 were tried as preliminary issues by the Labour Court. The Labour Court held on issue No. 1 that the appellant is not a workman within the meaning of the definition of workman contained in section 2(s) of the Act. Consequently, it was held that the reference is bad in law i n the light of the objections raised by the management in the written statement. The Labour Court held that there was no need to consider the other two issues and passed an award against the appellant. It was against that award that the appellant filed the writ petition which was dismissed by the Division Bench of the High Court in limine on 11.1.]982. This Court granted special leave to appeal against the judgment of the High Court and later directed the Labour Court to try the other issues on the basis that the appellant is a workman as per the Act. The Labour Court accordingly tried the other two issues and held that though the domestic enquiry 172 was fair and proper the finding of the enquiry officer was perverse. The Labour Court has observed: "The Enquiry officer should have given findings according to the evidence before him in the enquiry proceeding. He has neglected M 4 and M 6 while giving the findings in the enquiry. He also failed to summon the necessary witnesses and rejected the request of the workman for challenging those witnesses. " The Labour Court found that the punishment of dismissal awarded to the appellant was disproportionate to the gravity of the charge framed against him and that he is entitled to reinstatement with full back wages and continuity of service. The management filed Writ Position No. 4567 of 1982 in the High Court against the order of the Labour Court holding that the finding of the Enquiry officer was perverse and that the appellant is entitled to reinstatement with full back wages and continuity of service. The writ petition has been withdrawn to this Court by order dated 9.7.1983 to be heard along with the civil appeal. This is how the civil appeal and Writ petition have come up before us. Arguments were advanced before us by Mr. O. P. Malhotra appearing for the appellant and Mr. V. P. Choudhary appearing for management on two points viz. (1) whether the appellant was a workmen at the relevant time and (2) whether his dismissal is valid in law The charge framed against the appellant was as follows: "You were on duty on 31.7. 1979 and 1.8.1979 from 8 a.m. to 4 p.m. It was reported against you as under: On 31.7.1979 a person from M/s. Gurumukh Dass (building material supplier) came to IMI department with two copies of challan No. 105 dated 15.7.1979 for obtaining the signature of the person concerned in token of having received 2000 bricks. The copies of the challan were having the gate entry. Shri Durg Singh on instructions of Mr. S.K. Bagga, junior Engineer, went to the gate for confirming whether the bricks have been received in the factory premises as per the challan. It was found that the gate entry for the 173 supply of 2000 bricks as per the challan aforesaid had been A cancelled ill the gate register. You, however, took the challan (both copies) from Shri Durg Singh and cancelled the gate entry from the challan and returned both the copies to the person of M/s. Gurumukh Dass. That on 1.8.1979 as per the instructions of IMI department one Mr. Hira Lal, the worker of IMI department was sent to the gate office in connection with a challan of a water pump. As the worker i.e. said Mr. Hira Lal did not come back to IMI department for quite some time Mr. S.K. Bagga, Junior Engineer of IMI department personally went to the gate office. He (S.K. Bagga) apprised Mr. Deep Chand Senior Security officer of the irresponsible manner in which you delivered the challan to the person of M/s. Gurumukh Dass instead of to IMI department. When Mr. Deep Chand further verified this fact from you showed ignorance and demanded to know the name of the person who had said so. When informed that it was Durg Singh you without any . rhyme and reason or provocation abused Shri Durg Singh in a filthy manner saying (translated in English as I fuck the mother of Durg Singh; bring him). You were advised that being a responsible employee and that too belonging to the security department you should not abuse any employee but you continued in hot temper and demanded Mr. Durg Singh to be called in the gate office. When Shri Durg Singh was brought in your presence he once again confirmed and reiterated that you had given the challan to the person of M/s, Gurumukh Dass you lost all your senses and started abusing Shri S.K. Bagga left and right in a filthy, derogatory and abusive manner. You said (translated in English as you should try hard to your gandh; you cannot do anything wrong to me. You may go to Ram Kumar or you may go to Vijay Kumar). The above conduct of yours is gross mis conduct as you have lost the basic courtesy which you were supposed to extend to the employees as a responsible member of the security staff. The charges if proved will result in total loss of confidence in you. " The two questions arising for our consideration in the civil appeal and writ petition are: (i) whether the appellant was a workman within the meaning of section 2 (s) of the Act ?; and 174 (ii) whether the termination of the appellant 's service is proper ? On the first question there is evidence of only the appellant examined as WW 1 on his side and of the Personnel Manager examined as MW 1 on the side of the management. The evidence WW l shows that he was originally recruited as a clerk on a salary of Rs. 160/ per mensem. It was admitted by MW 1 that at the time of the termination of his service WW 1 was drawing total emoluments of Rs. 581/ per mensem as Charge man security equivalent to a security Inspector as stated in the appellant 's claim statement. He was working under the Security officer and various other heads of departments of the management. He has deposed that he used to perform the duty of a Chowkidar whenever one left the place temporarily for taking tea etc. He has also deposed that he used to accompany accounts branch people as a guard whenever they carried money. He has stated that he was ordered to fill up leave application forms of other workmen and counter sign them before they were approved by the Security officer. It has been elicited from him that he has filled up duty registers of workmen and that some small store items like torch cells were issued from the stores under his signatures. It is seen from his evidence that such store items could be got from the stores under the signatures of even watchmen. On the other hand, MW 1 has stated in his evidence that Exts. M l to M 7 are copies of leave applications of workmen containing the appellants signatures and that Exts. M 50 and M 51 bearing the appellant 's signatures are identity cards issued by the management to workmen. He has stated that the Security Inspector is provided with a chair and a table and three telephones one of them an intercom, one connected with the factory and the third connected with the exchange of the telephone department and that the appellant was an officer of the first rank in the respondent 's factory. There is no doubt whatsoever that MW 1 is exaggerating the position which the appellant was holding in the respondent 's factory. He has admitted that the telephone is provided in the Security Inspector 's room at the gate of the factory premises only to pass on immediate information to other places from the gate of the factory. The telephones provided in the Security Inspector 's room at the gate of the factory premises are not intended for the Security Inspector to carry on any managerial function. MW 1 has admitted in his evidence that the Security Inspector could not appoint or dismiss or even take any disciplinary action against any workman of the establishment. He has stated that the Security Inspector has control 175 Over 5 watchmen, drivers, Rickhaw pullars and sweepers 16 persons in all and is in overall charge of the factory during the first and third shifts which cover the period from 12 mid night to 8 a.m. while the important second shift is from 8 a.m. to 5 p.m. According to the evidence of MW 1 the Security Inspector allots duties to persons working under him by way of retaining them at the factory 's gate or sending them to watch towers or for moving around the factory or accompanying visitors to the factory. He could order his subordinates to come for overtime duty, sanction leave for them and recommend for advances and for their promotion. He could issue identity cards like Exts. M 50 and M 51 to workmen and draw small items of stores and issue them to the security staff. He has admitted that the Security Inspector has writing work for only 10 to 30 minutes in the second shift and almost no writing work at all in the first and third shifts and that the writing work consists of entering the names of visitors in the visitors ' register and making entries in respect of in coming and out going materials in the concerned registers. D section 2(s) of the Act describes a workman and reads: "workman ' means any person (including apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied and for the purpose of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has, led to that dispute, but does not include any such person (i) who is subject to the (45 of 1950), or the Army Act, 1950(46 of 1950), or the (62 of 1957); or (ii) who is employed in the police service or as an officer or other employee of a prison; or (iii) who is employed mainly in a managerial or administrative capacity; or 176 (iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature. " The respondent management can at best contend that the appellant would fall under section 2(s) (iii). That has been its attempt before the Labour Court and also in this Court. The management 's endeavour is to show that the appellant who admittedly was drawing total emoluments of only Rs. 581/ per mensem at the relevant time was employed in a managerial or administrative capacity and was therefore not a workman who could raise a dispute under the Act. This Court has stated in Llyods Bank Ltd. vs Panna Lal Gupta and others that though it would be legitimate to say that the work done in the audit department is important for the proper and efficient functioning of the bank it would be idle to elevate that work to the status of officers who supervise the work of everybody concerned with the bank 's establishment. It would be useful to remember in this connection what this Court had stated in Hind Construction and Engineering Company Ltd. vs Their workmen. It is this: "The tribunal 's Power has been stated in this Court in a large number of cases and it has been ruled that the tribunal can only interfere if the conduct of the employer shows lack of bona fides or victimization of employee or employees or unfair labour practice. The tribunal may in a strong case interfere with a basic error on a point of fact or a perverse finding but it cannot substitute its own appraisal of the evidence for that of the officer conducting the domestic enquiry though it may interfere where the principles of natural justice or fair play have not been followed or where the enquiry is so perverted in its procedure as to amount to no enquiry at all. The tribunal is not required to consider the propriety or adequacy of the punishment or whether it is excessive or too severe. But where the punishment is shockingly disproportionate regard being had to the 177 particular conduct and the past record or is such as no reasonable employer would ever impose in like circumstances, the tribunal may treat the imposition of such punishment as itself showing victimization or unfair labour practice. " A perusal of the evidence of WW l and MW 1 regarding the nature of the duties performed by the appellant shows that the substantial part of the work of the appellant consisted of looking after the security of the factory and its property by deputing the watchmen working under him to work at the factory gate or sending them to watch towers or around the factory or to accompany visitors to the factory and making entries in the visitors ' register as regards the visitors and in the concerned registers as regards materials entering or going out of the premises of the factory. It must be noted that MW 1 has admitted in his evidence that there is nothing in writing to show what duties are to be carried out by the appellant. Placed in such a situation the appellant might have been doing other items of work such as signing identity cards of workmen, issuing some small items of stores like torch cells etc. to his subordinate watchmen, which can be got from the stores even under the signatures of watchman and filling up application forms of other workmen and counter signing them or recommending advances and loans or for promotion of his subordinates. It must also be remembered that the evidence of both WW 1 and MW 1 shows that the appellant could never appoint or dismiss any workman or order any enquiry against any workman. In these circumstances we hold that the substantial duty of the appellant was only that of a Security Inspector at the gate of the factory premises and that it was neither. managerial nor supervisory in nature in the sense in which those terms are understood in industrial law. In the light of the evidence p and the legal position referred to above we are of the opinion that the finding of the Labour Court that the appellant is not a workman within the meaning of section 2(s) of the Act is perverse and could not be supported. On the evidence available on record we hold that the appellant clearly falls within the definition of a workman in section 2(s) of the Act and that the reference of the dispute under s.10 (i) (c) of the Act is valid in law. The finding of the Labour Court that the enquiry was fair and proper in the light of its own finding that the enquiry officer failed to summon the necessary witnesses and rejected the request of the appellant for challenging the witnesses could not be stated to be correct. On the merits some witnesses were examined on the side of the management before the Labour Court and they are S.K. 178 Bagga, MW 2, Hira Lal, MW 3, Deep Chand, MW 4 and Laxmi Chand, MW 5 an Accountant of M/s. Gurumukh Dass, MW 2 has deposed about the appellant abusing Durg Singh who according to the appellant was the Secretary of a Labour Union while the appellant and others were trying to canvass membership for a rival trade union. MW 3 and 4 are stated to have corroborated the evidence of MW 2. MW 5 is the only independent witness examined on the side of the management. It is seen from the judgment of the Labour Court relating to the merits of the case that MW 5 who has deposed about the challans Exts. M 7 and M 8 having been returned to the person who accompanied him from the maintenance department had not supported the management that the appellant abused Durg Singh or any other person within the premises of the factory. It is also seen from the judgment of the Labour Court that though the appellant had produced before the Enquiry officer 5 sheets of papers with the signatures of about 100 workmen of the factory in support of the statement that the appellant had not abused anyone in the factory during the course of his service and the management had produced Exts. M 6, a list of 90 persons before the Enquiry officer, he had not called any of those persons to ascertain the truth regarding the alleged abuse of Durg Singh and S.K. Bagga by the appellant. It is also seen from the judgment of the Labour Court that the appellant has not given a list of the management 's witnesses before the commencement of the domestic enquiry. In these circumstances, we are of the opinion that the conclusion of the Labour Court that the Enquiry officer had not acted properly in the proceedings and that he had not given full opportunity to the appellant as required by law does not call for any interference. The charge levelled against the appellant is not a serious one and it is not known how the charge even if proved would result in any much less total loss of confidence of the management in the appellant as the management would have it in the charge. It was argued in the Labour Court that there was no previous adverse remark against the appellant. There is nothing record to show that any previous adverse remark against the appellant had been taken into consideration by the management for awarding the extreme penalty of dismissal from service to the appellant even if he had in fact abused in filthy language Durg Singh and S.K. Bagga. We are therefore of the opinion that the punishment awarded to the appellant is shockingly disproportionate regard being had to the charge framed against him. We are also of the opinion that no responsible employer would ever impose in like circumstances the punishment of dismissal to the employee and that victimization or unfair labour practice could well be inferred from the conduct of the management in 179 awarding the extreme punishment of dismissal for a flimsy charge of A abuse of some worker or officer of the management by the appellant within the premises of the factory. We therefore hold that the termination of the appellant 's service is invalid and unsustainable in law, and that he is entitled to reinstatement with full back wages and other benefits including continuity of service. The appeal is allowed accordingly with costs quantified at Rs. 1,000. The writ petition is dismissed without costs. H.S.K. Appeal allowed.

The appellant, an employee of the respondent, was charged for abusing some fellow worker or officer of the management within the premises of the factory of the respondent. In domestic enquiry the Enquiry officer found the appellant guilty of the charge. The management dismissed the appellant. On a reference being made under section 10(i)(c) of the the Labour Court held on preliminary issue that the reference was bad in law because the appellant was not a workman under section 2(s) of the Act. The Labour Court 's findings were challenged by the appellant in a writ petition which was dismissed by the High Court in limine On a special leave petition being filed by the appellant from which this appeal arises, this Court directed the Labour Court to try the other issues before it on the basis that the appellant was a workman. The Labour Court held that the finding of the Inquiry officer was perverse; the punishment of dismissal was disproportionate to the gravity of the charge and the appellant was entitled to reinstatement with full back wages and continuity of service. The management filed a writ petition in the High Court challenging the findings of the Labour Court. This writ petition was transferred to this Court. Allowing the appeal and dismissing the writ petition, ^ HELD: A perusal of the evidence shows that the substantial part of the work of the appellant consisted of looking after the security of the factory and its property by deputing the watchmen working under him to work at the factory gate or sending them to watch towers or around the factory or to accompany visitors to the factory and making entries in the visitors ' register as regards the visitors and in the concerned registers as regards material entering or, going out of the premises of the factory. The appellant could never appoint or dismiss any workman or order any enquiry against any workman. In these circumstances 170 it is held that the substantial duty of the appellant was only that of a Security Inspector at the gate of the factory premises and that it was neither managerial nor supervisory in nature in the sense in which those terms are understood in industrial law. Therefore he clearly falls within the definition of workman under s.2(s) of the Act and the reference of the dispute under section 10(i)(c) of the Act is valid in law. [177B C, E G] It is seen from the judgment of the Labour Court that though the appellant had produced before the Enquiry officer 5 sheets of papers with the signatures of about 100 workmen of the factory in support of the statement that the appellant had not abused anyone in the factory during the course of his service and the management had produced Exts. M 6, a list of 90 persons before the Enquiry officer, he had not called any of those persons to ascertain the truth regarding the alleged abuse by the appellant. It is also seen from the judgment of the Labour Court that the appellant was not given a list of the management 's witnesses before the commencement of the domestic enquiry. In these circumstances, the conclusion of the Labour Court that the Enquiry officer had not acted properly in the proceedings and that he had not given full opportunity to the appellant as required by law does not call for any interference. [178C E] The punishment awarded to the appellant is shockingly disproportionate regard being had to the charge framed against him. No responsible employer would ever impose in like circumstances the punishment of dismissal to the employee, and victimization or unfair labour practice could well be inferred from the conduct of the management in awarding the extreme punishment of dismissal for a flimsy charge of abuse of some worker or officer of the management by the appellant within the premises of the factory.[178G H, 179A] Therefore termination of the appellant 's service is invalid and unsustainable in law. [179A] Llyods Bank Ltd. vs Panna Lal Gupta & others and Construction and Engineering Company Ltd. vs Their Workmen , referred to.

n that the products must contain visible pieces of bones and that the expression is limited only to the primary products obtained on crushing of bones such as bone sinew, bone grist, and bone meal. [995C] The ossein and gelatine manufactured by the respondent can, without straining the expression used in the notification, be described as bone products. [996GI & CIVIL APPEALLATE JURISDICTION: Civil Appeal No. 1420 of 1988. From the Order dated 13.11.1987 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. 1441/83 C in Order No. 915/87 C. M.K. Banerjee, Solicitor General, H. Sharma, Mrs. Sushma Suri for the Appellant. Soli J. Sorabjee, A.N. Haksar. R. Narain, D.N Misra and P.K. Ram for the Respondent. The Judgment of the Court was delivered by RANGANATHAN, J. A very short question is involved in this appeal under section 35L of the Central Excises & Salt Act, 1944. The respondent, M/s Protein Products of lndia, manufactures ossein and gelatine. It claimed exemption from excise duty under ; notification of the Government of India dated 30.6.1979. By this notification one more item was added to a list of items exempted from payment of excise duty under an earlier notification dated 1.3.75. This item reads as follows: Crushed bones and bone products. ' The respondent company manufactures the above products from bones. Ossein is prepared from bones by dissolving the PG NO 995 mineral part of the bones with phosphoric acid. From the ossein so obtained, gelatine is obtained by treating the same further with an alkali. Although gelatine can also be manufactured from other sources such as pig skin and hides, it is common ground that the respondent company was manufacturing gelatine only from bones. The Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) has taken the view that the products manufactured by the respondent company are 'bone products ' and that the company is entitled to the benefit of the notification dated 30.6.79 referred to earlier. The Tribunal pointed out that, admittedly, the raw material for the two products in question is crushed bones. It accepted the argument urged on behalf of the respondent company that the word 'product ' only directed attention to the principal raw material from which the product in question is derived. Bone products ' does not mean that the products must contain visible pieces of bones and that the expression is limited only to the primary products obtained on crushing of bones such as bone sinew, bone grist, and bone meal. Reference was made to the description of gelatine in the Indian Standard Specification as a "purified product obtained by partial hydrolysis of collagen, derived from skin, white connective tissues and bones of animals" and to a definition of gelatine in 'Chemical Process Industries ' as "derived by hydrolysis from collagen the white fibres of the connective tissues of the animal body. particularly in the skin (Corium), bones (Ossein) and tendons." The Tribunal also referred to an earlier order wherein di calcium phosphate. obtained by treating with acid the mineral portions seperated from crushed bones, had been held entitled to the benefit of the same notification, treating it 'bone product '. The learned Solicitor General, appearing on behalf of the appellant, submitted that the view taken by the Tribunal is erroneous. According to him, the words 'bone products ' should he read. along with words 'crushed bones ' and, therefore, the exemption under the notification is only limited to primary products obtained on crushing of bones such as bone sinew, bone grist and bone meal. He submitted that ossein and gelatine cannot be described as hone products because they could also be obtained from raw material other than bones, such as pig skin and hides. What is essential, according to him. is to consider whether the products in question retain the principal characteristics and physical properties of crushed bones. In other words, the argument appears to be that only products obtained by a PG NO 996 physical processing of bones could be described as bone products but not products obtained by treating bones with chemicals or acids. We see no reason to limit the availability of the exemption under the notification in the manner contended for on behalf of the appellant. The terms of the notification only refer to two items crushed bones and bone products and there is no scope for applying any rule of ejusdem generis as contended for by the learned Solicitor General. There is also no justification for importing any limitation as to the nature of the products that are entitled to exemption. We see no logic or principle in holding that only products obtained by a physical treatment of bones such as crushing or powdering would be entitled to exemption and not products obtained by chemical treatment. It is true that gelatine may be produced not merely from bones but also other things such as the skin and tissues of animals. But, as already mentioned, it is not in dispute that only bones are the raw material from which the products manufactured by the respondent company are derived. It is not the case of the appellant that in the manufacture of gelatine or ossein, other raw materials are also used to such an extent as to completely overshadow or render insignificant the utilisation of bones in the process. The products in question are derived merely by the extraction of the mineral parts of the bones. Gelatine is obtained by a further treatment, with an alkali, of the ossein manufactured from the bones. It is the collagen which forms the organic content of the bones that is utilised in the manufacture of ossein and gelatine. The word 'product ' is defined in Webster 's Comprehensive Dictionary as "anything produced or obtained as a result of some operation or work". The expression 'bone products ' therefore merely means anything produced or obtained from bones. Whether such derivation is by a simple physical process or by a chemical reaction would seem to make no difference to the end product. Buttermilk, for instance does not cease to be a milk product merely because a chemical process is involved in the transformation. The ossein and gelatine manufactured by the respondent can, without straining the expression used in the notification, he described as bone products. We are, therefore, in agreement with the view taken by the tribunal that the products manufactured by the respondent company are entitled to the exemption under the notification dated 30.6.79. We may also here usefully reiterate the observations made by us in Collector of Customs, Bombay vs Swastic Woollen (P) Ltd. & Ors. , J.T. with regard PG NO 997 to the parameters of interference by this Court in an appeal from the CEGAT. That case concerned the meaning of the expression "wool waste" and, though those observations were made in the context of section 130E of the , they are of equal application the present context as well. We said: "In the new scheme of things, the Tribunal have been entrusted with the authority and the jurisdiction to decide the questions involving determination of the rate of duty of excise or to the value of goods for purposes of assessment. An appeal has been provided to this Court to over see that the subordinate Tribunals act within the law. Merely because another view might be possible by a competent; Court of law is no ground for interference under section t30E of the Act though in relation to the rate of duty of customs or to the value of goods for purposes of assessment, the amplitude of appeal is unlimited. But because the jurisdiction is unlimited, there is inherent limitation imposed in such appeals. The Tribunal has not deviated from the path of correct principle and has considered all the relevant factors. If the Tribunal has acted bona fide with natural justice by a speaking order, in our opinion, even if superior Court feels that another view is possible. that is no ground for substitution of that view in exercise of power under clause (b) of section 130E of the Act. ' ' In the present case the Tribunal has taken into consideration all relevant factors and committed no error of principle or law. Even assuming that the terms of the exemption notification can also lend themselves to a narrower construction which may commend itself to another Tribunal or Court that alone can be no ground to interfere with the conclusion reached by the Tribunal. We therefore see no reason to entertain this appeal which will stand dismissed. S.K.A. Appeal dismissed.

The respondent company manufactures ossein and gelatine from bones. Ossein is prepared from bones by dissolving the mineral part of the bones with phosphoric acid. From the ossein so obtained, gelatine is obtained by treating the same further with an alkali. The company claimed exemption from excise duty under a notification of the Government of India dated 30.6.1979 wherein crushed bones and bone products were added as an item exempt from payment of excise duty. The respondent appealed to the Appellate 'Tribunal which held that the products manufactured by the respondent company are 'bone products ', and the company is entitled to the benefit of the notification, treating it as a 'bone product '. The appellant Revenue, therefore, filed an appeal before this Court under section 35L of the Central Excises & Salt Act,1944 and contended that the words bone products ' should be read along with the words crushed bones, and ossein and gelatine cannot be described as bone products because they could also be obtained from raw material other than bones, such as pig skin and hides. Dismissing the appeal. the Court, HELD: The expression 'bone products merely means anything produced or obtained from bones. Whether such derivation is by a simple physical process or by a chemical reaction would seem to make no difference to the end product. [996F] The products in question ossein are derived merely by the extraction of the mineral parts of the bones. Gelatine is obtained by a further treatment, with an alkali, of the ossein manufactured from the bones. It is the collageon PG NO 993 PG NO 994 which forms the organic content of the bones that is utilised in the manufacture of ossein and gelatine. [996E] Collector of Customs, Bombay vs Swastic Woollen (P) Ltd.

Criminal Appeal No. 152/59. , xi Appeal by Special leave from the judgment and Order dated May 12, 1959 of the Allahabad High Court in Criminal Revision No. 1182 of 1957. Nur ud din Ahmed, J.,B. Dadachanji, O. C. Mathur, and Ravindar Narain for the Appellants. 852 G. C. Mathur and C.A. Lal for the Respondent. May 3. The Judgment of the Court was delivered by KAPUR, J. The appellants are father and son carring on business in vegetable ghee at Aligarh. They along with Romesh, the second son of appellant Jagannath Prasad were prosecuted under section 14 (d) of the U. P. Sales Tax Act, 1948 (U.P. 15 of 1948) hereinafter called the 'Act ' and under section 471 read with section 468 and section 417 of the Indian Penal Code. They were all acquitted of the charge under section 468. Jagannath Prasad was convicted under section 471 and 417 of the Indian Penal Code and a. 14 (d) of the Act and was sentenced to two years ' rigorous imprisonment under a. 471, to one years ' rigorous imprisonment and a fine of Rs. 1,000/ under section 417 and to a fine of Rs. 1,000 under section 14 (d) of the Act. Bhagwan Das was convicted under section 14 (d) of the Act and sentenced to a fine of Rs. 1, 000/ . Romesh was acquitted. The sentences passed on Jagannath Prasad were. concurrent. Their 'appeal to the Sessions Judge was dismissed and in revision to the High Court Jagannath Prasad was acquitted of the offence under a. 417 of the Indian Penal Code but the other convictions and sentences were upheld. Against this judgment and order of the High Court of Allahabad the appellants have come to this court by special leave. The facts leading to the appeal are these: In 1950 51, the firm of the appellants purchased vegetable ghee valued at about Rs. 3 lacs from places outside the State of U. P. in the name of four fictitious firm. The firm made its return for that year to the Sales Tax Officer Aligarh and did not include the sale proceeds of these transactions on the ground that they had purchased them from these four firms who were supposed to be carrying 853 on business in Hathras, Aligarh, and other places in U. P. By thus not including the proceeds of the sales of these transactions the firm evaded payment of sales tax for that year on those transactions. The return of sales tax made by the firm was accepted by the Sales Tax Officer with the consequence that the sale of goods covered by those transactions was not taxed. A complaint was made against the Sales Tax Officer in regard to these transactions; an enquiry was held with the result that the appellants and Romesh were prosecuted and convicted as above stated. In the High Court there was no controversy about the facts i. e. the finding of the courts below that the appellants ' firm purchased vegetable ghee from outside U. P. and did not show the sale proceeds of the sale of those goods on the ground that they had been purchased from inside the State of ' (J. P. when in reality they had been purchased from outside the State, that the statements made by the appellant Jagannath Prasad before the Sales Tax Officer were false and that the bills produced by him before the Sales Tax officer were forged. The conviction was challenged on grounds of law alone. Before us five points were raised: (1) that no sales tax was exigible on these transactions under a. 3A of the Act in 1950 51 and liability arose by the amendment of the Act in 1952 which gave retroactive operation to the section and became applicable to sales in dispute and therefore there could be no prosecution under an ex post facto amendment; (2) the trial of the appellants was illegal because of ' want of complaint by the Sales Tax Officer under a. 195 of the Criminal Procedure Code; (3) there was no offence under section 14 (d) of the Act; (4) forged invoices were produced by appellant Jagannath Prasad because they were called for by the Sales Tax Officer and therefore it cannot be said. that they were used by the appellant and (5) the Sales Tax Officer having accepted 854 he invoices as genuine no prosecution could be Entertained in regard to those invoices. Now the appellants cannot be prosecuted on the basis of any amendment subsequent to the date of the alleged offence committed by them. Both parties are agreed on that and therefore we have to see the Act as it stood on the date when the offence is alleged to have been committed. According to the charge the offence was committed on or about July 16, 1951, when forged invoices produced by the appellants before the Sales Tax Officer. So what we have to see is the law as it stood on that day. Section 3 of the Act deals with liability to tax under the Act and section 3A with single point taxation. Under section 3 every dealer was required to pay on his turnover of each assessment year a tax at the rate of three pies a rupee. Thus the tax was payable in regard to all sales but under section 3A (1) the tax was leviable only at a single point. That section provided. section 3A (1) "Notwithstanding anything contained in section 3, the State Government may, by notification in the official Gazette, declare that the turnover in respect of any goods or class of goods shall not be liable to tax except at such single point in the series of sales by successive dealers as may be prescribed". The Government could declare the tax to be payable at a single point but there were two requirements; there had to be a notification in the Official Gazette declaring the point at which the tax was payable and in the series of sales by successive dealers it had to be "as may be prescribed" i. e. as may be prescribed by rules. Section 3A was amended in 1952 with retrospective effect but retroactive provision is not applicable to the present proceedings. Under section 3A a notification No. 1 (3) was issued on 855 June 8, 1948, declaring that the proceeds of sales of vegetable ghee imported from outside shall not be included in the turnover of the dealer other than the importer himself. The effect of the notification thus was that if a dealer imported vegetable ghee from outside U. P. and sold it he was required to include the sale proceeds in his turnover but the other dealers who bought vegetable ghee from the importer in U. P. and sold it were not so required. The appellants having thus imported the vegetable ghee from outside U. P. were required by the notification to include the proceeds in their turnover and it was to avoid this that they falsely produced forged invoices that they had purchased the vegetable ghee from those fictitious dealers within the State of U. P. and thus if the notification was an effective notification the appellants successfully evaded the payment of sales tax which under the law they were required to pay. But it was agreed that the notification was ineffective in view of the words "as may be prescribed" because that could only be done by rules and no rules bad been made under section 3A which made every dealer liable to sales tax if he was an importer from outside U. P. To this, extent the contention of the appellants is well founded and therefore under a. 3A merely by notification the Government could not prescribe a single point taxation as was done by the notification but that does not help the appellants very much. Under section 3 every dealer was liable to pay sales tax on every transaction and section 3A only gave relief in regard to sales at every point and thus prevented multi point taxation. If the notification under section 3A was ineffective, as indeed it was, the appellants were required to pay tax on all their sales and in order to escape multi point taxation they took advantage of an ineffective notification and tried the false plea of the goods having been imported by fictitious persons and their having purchased those goods from those 856 fictitious dealers and in this manner the appellants escapes payment of sales tax under section 3. In other words they tried to take advantage of section 3A by producing false documents and thereby evaded payment of tax under section 3 which every dealer was required to pay on his turnover. In trying to get the benefit under the ineffective notification issued under section 3A the appellants evaded payment of tax under section 3 which they were in any case liable to pay. It cannot be said therefore that no offence was committed under section 14 (d) of the Act which provides: Section 14. ,Offences and penalties. Any person who (a). . . (b). . . (c). . . (d) fraudulently evades the payment of any tax due under this Act, shall, without prejudice to this liability under any other law for the time being in force, on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees, and where the breach is a continuing breach, to a further fine which may extend to fifty rupees for every day after the first during which the breach continues". It is no defence to say that the appellants were asked by the Sale,% Tax Officer to produce invoices. The appellants were trying to get exclusion from their turnover of the sale of goods worth about 3 lacs and had made statements before the Sales Tax Officer in regard to it on July 9, 1951, and in order to prove that the goods 857 were not required to be included .,in the turnover the invoices were produced by appellant Jagannath Prasad. When a fact has to be proved before a court or a tribunal and the court or the tribunal calls upon the person who is relying upon a fact to prove it by best evidence it can not be a defence as to the offence of forgery if that best evidence which, in this case, was the invoices turn out to be forged documents. A person who produced those documents cannot be heard to say that he was required to prove his case by the best evidence and because be was so required be produced forged documents. It was then submitted that the Sales Tax Officer was a court within a. 195 of the Criminal Procedure Code and in the absence of a complaint in writing by such an officer no cognizance could be taken of any offence punishable under section 471 of the Indian Penal Code. This, in our opinion, is an equally erroneous submission. The Sales Tax Officers are the instrumentalities of the State for collection of certain taxes. Under the Act and the Rules made thereunder certain officers are appointed as Sales Tax Officers who have certain duties assigned to them for the imposition and collection of taxes land ID the process they have to perform many duties which are of a quasijudicial nature and certain other duties, which are administrative duties. Merely because certain instrumentalities of state employed for the purpose of taxation have, in the discharge of their duties, to perform certain quasi judicial functions they are not converted into courts thereby. In a recent judgment of this Court in Shrimati Ujjam Bai vs The State of U.P. (1), all the opinions were unanimous on this point that taxing authorities are not courts even though they perform quasi judicial functions. The following observation of Lord (1) (1963) 1 S.C.R. 778. 858 Sankey L. C. in Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation (1)was quoted with approval : The authorities are clear to show that there "The authorities are clear to show that there are tribunals with many of the trappings of a court which, nevertheless are not courts in the strict sense of exercising judicial power". Lord Sankey also enumerated some negative propositions as to when a tribunal is not a court. At p. 297 his lordship said : "In that connection it may be useful to enumerate some negative propositions on this subject : 1. A tribunal is not necessarily a Court in this strict sense because it gives a final decision. Nor because it hears witnesses on oath. Nor because two or more contending parties appear before it between whom it has to decide. Nor because it gives decisions which affect the rights of subjects. Nor because there is an appeal to a Court. Nor because it is a body to which a matter is referred by another body. See Rex vs Electricity Commissioners Hidayatullah J., 'in Shrimati Ujjam Bhai(2) case described Sales tax authorities thus : "The taxing authorities are instrumentalities of the State. They are not a part of the legislature, nor are they a part of the judiciary. Their functions are the assessment and collection of taxes and in the process of assessing taxes, they follow a pattern of action which is considered Judicial. They are not thereby converted into Courts of Civil judicature. They still (1) , 283. (2) (1963) 1 S.C R. 778. 859 remain the instrumentalities of the State and are within, the definition of State" in article 12". No doubt the Sales Tax officers have certain powers which, are similar to the powers exercised by courts. but still they are not courts as understood 'in section 195 of the Criminal Procedure Code. In sub section 2 of B. 195 it is provided: section 195(2) "In clauses (b) and (e) of sub section. (1) the term "Court" includes a Civil Revenue or Criminal Court, but does not include a Registrar or Sub Registrar under the Indian Registration Act, 1877". It cannot be, mid that a Sales Tax Officer, is a I Revenue Court. Under section 2(a) of the Act an assessing authority is defined to mean any person authorised by the State Government to make assessment under the Act and under R. 2(h) 'a Sales, Tax Officer means : "Sales Tax Officer" means a Sales Tax Officer of a circle appointed by the State Government to perform the duties and exercise the powers of an assessing authority in such circle". Thus under the Act a Sales Tax Officer is only an amassing authority. Under section 7 of the Act, if the Sale*. Tax Officer, after making such enquiries,as he thinks necessary is, satisfied that a return made is correct and, complete, he shall assess the tax on the basis thereof ' and it no return is submitted he, can make such enquiries as he considers necessary and then determine the turnover of a dealer, Thus his determination depends upon enquiries he may make and which he may, consider necessary. Sections 9, 10 and 11 of the Act deal with Appeals, Revisions and Statement of the Case to the High court. Under a. 13 power. is given 860 to a Sales Tax Officer to require the production of all accounts, documents and other information relating to business and accounts and registers ,shall be open to inspection of the Sales Tax Officer at all reasonable times. He has the power to enter any office, shop, godown, vehicle or any other place in which business is done which is a power destructive of the Sales Tax Officer being a Court which is a place where justice is administered as between the parties whether the parties are private persons or one of the parties is the State. Under section 23 certain secrecy is attached to documents filed before the Sales Tax officer and information received by him. Similarly under R. 43 certain power is given to the Sales Tax Officer to calculate turnover when goods are sold for consideration other than money and this is after such enquiry as he considers necessary. All these provisions show that the Sales Tax Officer cannot be equated with a Court. In our opinion therefore the Sales Tax Officer is not a Court. In Krishna vs Goverdhansiah(1), it was held that the Income Tax Officer is not law court within the meaning of section 195 of the Criminal 's Procedure Code and this view was accepted by this court in Shrimati Ujjam Bai 's(2) case. In Brajnandan Sinha vs Jyoti Narain(3), a Commissioner appointed under the Public Enquiries Act 1950 was held not to be a court. Shell Co. of Australia vs Federal Commissioner of Taxation (4) was referred to in that case. At p. 967 the following passage from Halsbury 's Laws of England, Hailisham Edition, Vol. 8, p. 526 was approved: "Many bodies are not courts, although they have to decide questions, and in so doing have to act judicially, in the sense that the proceedings must be conducted with fairness (1) A.I.R. (1954) Mad. (2) (1963) 1 S.C.R. 778. (3) ; (4) (1931) A.C. 275,2B3. 861 and impartiality, such as assessment committees, guardian committees, the Court of referee constituted under the Unemployment Insurance Acts to decide claims made on the Insurance funds the benchers of the Inns of Courts when considering the conduct of one of their members, the General Medical Council when considering questions affecting the position of a medical man" That passage is now contained in Vol. 9 of the 3rd Edition at p. 343. But it was submitted that the Sales Tax officer while acting as an assessing authority is a court within the meaning of section 195 (2) of the Procedure Code because by the amendment of 1923 the definition of the word "court" was enlarged substituting the word "includes" in place of the word "means" and the section now reads as has been set out above. Undoubtedly by this change the legislature did mean to make the definition of the word "court" wider but that does not enlarge the definition of the words "Revenue Court". The track of decision which was pressed on our attention is based primarily on a full bench judgment of the Bombay High Court in In re Punemchand Maneklal(1). In that case an Income tax Collector was held to be a Revenue Court within the meaning of the word as used in section 195. The learned Chief Justice who gave the judgment of the court proceeded on the basis that inquiries conducted according to the Forms of judicial procedure under Chapter IV of the Incometax Act were proceedings in a Revenue Court. This was on the ground that under the law as it then stood revenue questions were generally removed from the cognizance of civil courts and the officers charged with the duty of deciding disputed question relating to revenue between an individual and the (1) , Bom. 862 Government would be invested with the functions of &,,Revenue Court". This view was followed by the Bombay High Court in State vs Nemchand Pashvir Patel After referring to the various powers which were given to the Sales Tax Officers under the B " bay Sales Tax Act that Court proceeded to say that the Sales Tax Officers under the Bombay Sales Tax Act were Revenue Courts because ' they had jurisdiction to decide Questions relating to revenue, are exclusively empowered with the powers which are normally attributes of a court or a tribunal land are authorised to adjudicate upon a disputed question of law or fact relating to the rights of the citizens. The Madras High Court in In re B. Nataraja Iyer held that a Divisional Officer hearing appeals; under the Income tax Act was a court within the meaning of a. 476 of the Criminal Procedure Code but a Tehsildar who was the original assessing authority was not because there was no lis before him. There is one passage in the judgment of Sundara Ayyar J., which is of significance. It was said: "I may observe that I am prepared agree with Dr. Swaminathan that more. authority to receive evidence would not make the officer recording it a Court". At page 84, it was said that the determination of the assessment in the first instance may not be of a court although the assessing officer may have the power to record statements. But an appeal against the assessment is dealt with by the Collector in the manner in which an appeal is ' disposed of by ' a Civil Court. In this connection reference may be; made to the statement of the law contained in the judgment of Venkatarama Ayyar J., in Shri Virinder Kumar Satyawadi vs The State of Punjab (2). There, (1) (1956)7 S.C.R. 404. (2) , 1018. 863 the, distinction between a quasi judicial tribunal and a court,was given as follows "It may be stated broadly that what disti nguished a Court from a quasi judicial tribu nal is that it is charged with a duty to decide disputes in a judicial manner and declare, the rights of parties in a definitive judgment. ,To decide in a judicial manner involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it. And it also imports an obligation on the part of the authority to decide the matter on a consideration of the evidence adduced and in accordance with law. When a question therefore arisen as to whether an authority created by an Act is a Court as, distinguished from a quasi judicial tribunal, what has to: be decided.is whether having regard to the provisions of the Act it possesses all the attributes of a Court". Dealing with quasi judicial tribunals it was observed in Gullapelli Negeswara Rao vs The State of Andhra Pradesh(1) : ",The concept of a quasi judicial act, implies that the act is not wholly judicial, it describes only a duty cast on the executive body or authority to,conform to the norms. of judicial procedure in performing some act in the, 'exercise of its executive power". It is not necessary to refer to other cases because they were decided on their own facts and related to different tribunals. In our opinion a Sales Tax Officer is not a Court within the meaning of.s. 195 of,the criminal Procedure Code and there. fore it was not necessary for a Sales Tax Officer to (1) (1959) Supp. 1 S.C.R. 319, 353 4. 864 make a complaint and the proceedings without such a complaint are not without jurisdiction. In our opinion the appellants were rightly convicted and we therefore dismiss this appeal. The appellant Jagannath Prasad must surrender to his bail bonds. Appeal dismissed.

The appellants who carry on the business in vegetable ghee purchased vegetable ghee from outside U. P. in the name of four fictitious firms. In their return of sales tax they did not include the sale proceeds of these transactions on the ground that they had purchased from the four firms and that under a notification made under section 3A of the U. P. Sales Tax Act, tax was leviable only at a single point on the sale by the outside suppliers to these four firms. In support of this the appellant No. 1 made a false statement before the Sales tax Officer and also filed forged bill,. before him. The return was accepted by the Sales Tax Officer with the result that the sales covered by these transactions were not taxed. The appellants were tried and convicted for offence under section 471 Indian Penal Code for using forged documents and under section 14(d) of the Act for fraudulently evading payment of tax due under the Act. The appellants contended that the trial for the offence under section 471 was illegal as no complaint had been made by the Sales Fax Officer as required by section 14 (d) of the Act was not made out as no tax was payable under 'section 3A because the notification issued thereunder was invalid. Held, that the Sales Tax Officer was not a Court within the meaning of section 195 Code of Criminal Procedure and it was not necessary for him to make a complaint for the prosecution of the Appellants under section 471 Indian Penal Code. A Sales Tax Officer was merely an instrumentality of the State for purposes of assessment and collection of tax and even if he was required to perform certain quasi judicial functions, he was not a part of the judiciary. The nature of the functions, of a Sales Tax Officer and the manner prescribed for their 851 performance showed that he could not be equated with a Court. Nor could he be said to be a Revenue Court. Though the definition of Court in section 195 of the Code Was enlarged by the substitution of the word "include" for the word "means" by the amendment of 1923, it did not change the definition of "Revenue Court. " Smt. Ujjam Bai vs The State of U. P. (1963) 1 S.C.R. 778), Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation and Brajnandan Sinha vs Jyoti Narain ' ; , applied. Krishna vs Gocerdhanaiah, A. I. R. , approved. In re: Punamchand Maneklal (1914) 1. L. R. and State vs Nemchand Pashvir Patel, (1956) 7 section T. C. 404 not approved. In re : R. Nataraja Iyer (1914) 1. L. R. and Shri Virender, Kumar Satyawadi vs The Sate of Punjab,[1955] 2 section C. R. 1013 referred to. Held, further that the appellants were rightly convicted under section 14 (d) of the Act. Sales tax was payable under s.3 of the Act in respect of all sales. But under s.3A it was leviable only at a single point if the Government issued a notification declaring the point at which tax was payable and it was so prescribed by the rules. Under the notification issued by the Government tax was payable only by the dealer who imported the goods and sold them. The appellants having imported the ghee were liable to pay the tax on the sales of this ghee which they fraudulently evaded. Though the notification was ineffective as no rules were made under the Act prescribing the single point, it did not help the appellants, as the only effect of this was that section 3A did not come into play. In trying to get the benefit of the ineffective notification under section 3 A the appellants evaded payment of tax under section 3 which they were liable to pay.

Civil Appeal No. 174 of 1976. Appeal by Special Leave from the Judgment and order dated 1 11 1974 of the Delhi High Court in L.P.A. No. 19/71. P. P. Rao, A. K. Ganguli and R. Venkataramani for the Appellant. T. A. Francis and Miss A. Subhashini for the Respondents. Admittedly he was appointed by the Comptroller and Auditor General. The only point that arises or, at any rate, we are concerned with is, as to whether the retirement order is in conformity with Rule 2(a) of the C.C.S. (C.C.A.) Rules 1965. The appointing 555 authority according to Rule 56(j) is the competent authority. Who then, is the appointing authority in the context of this case? The answer is to be sought under Rule 2(a) which reads thus: "In these rules, unless the context otherwise, requires 2 (a) appointing authority in relation to a Government servant means (i) the authority empowered to make appointments to the Service of which the Government servant is for the time being a member or to the grade of the Service in which the Government servant is for the time being included, or (ii) the authority, empowered to make appointments to the post which the Government servant for the time being holds, or (iii) the authority which appointed the Government servant to such Service, grade or post, as the case may be, or (iv) where the Government servant having been a permanent member of any other service of having substantively held any other permanent post, has been in continuous employment of the Government the authority which appointed him to that service or to any grade in that service or to that post. whichever authority is the highest authority. " The most significant part of the rule states, after setting out alternative authorities, that the appointing authority is one out of these four categories who is the highest. This is emphatically brought out by the expression "whichever authority is the highest". There is no doubt that among the four classes of authorities listed under Rule 2(a), the one falling under sub rule (iii) viz. Comptroller and Auditor general (in the present case) is the highest. It evidently follows that the order of retirement to be legal, must be issued by the Comptroller and Auditor General, but actually the impugned order of retirement was issued by the Director of Commercial Audit. In fact the order of retirement runs thus: "Whereas the Director of Commercial Audit is of the opinion that it is in the public interest to to do so. " Obviously the Director of Commercial Audit is a lesser official. The conclusion is, therefore, inescapable that the compulsory retirement is contrary to law. 556 The High Court, in its extensive judgment, considered the scheme of the rules and, indeed, referred to the point mentioned above but after highlighting this question as one most emphasised by the appellant, has slurred over the point and proceeded to discussion of other issues. We are concerned with the vital perhaps the fatal aspect of the order which has not received due attention at the hands of the High Court. In this view, on account of the contravention of F.R. 56(j) read with Rule 2(a) of the (C.C.A.), we are constrained to come to the conclusion that the retirement is illegal. The appellant has already become suparannuated and therefore, he will be eligible to his salary (by which we mean to include other allowances automatically admissible and going with salary) for the period between the date of compulsory retirement and the date of actual superannuation at the age of 58. It is unfortunate that this legal flaw has proved fatal. Administrative law is a course necessary for administrative officers at the highest levels so that such flaws may not vitiate orders they pass. Eventually Government is put to considerable loss for no fault of it except that no proper legal training in this branch of the law for the concerned officers had been given by it. With these observations we allow the appeal, but parties will bear their costs. V.D.K. Appeal allowed.

Allowing the appeal by special leave, the Court, ^ HELD. Rule 2(a) of the C.C.S. (C.C.A.) Rules, 1965 states, after setting out alternative authorities, that the appointing authority is one out of four categories who is the highest, by using the expression "whichever authority is the highest". There is no doubt that of the four classes of authorities listed under Rule 2(a), the one falling under sub rule (iii) viz. Comptroller & Auditor General (in the present case) is the highest. Therefore the order of the retirement to be legal must be issued by the Comptroller & Auditor General. The impugned order of retirement issued by the Director of the Commercial Audit who is a lesser official is contrary to law. On account of the contravention of F.R. 56(j) read with rule 2(a) of the C.C.S. (C.C.A.) Rules, 1965, the retirement is illegal. [555 E G, 556 B] Observation: Administrative law is a course necessary for administrative officers at the highest levels so that such flaws may not vitiate orders they pass.

Appeal No. 1611 of 1968. Appeal from the judgment and order dated December 5, 1966 of the Allahabad High Court in Special Appeal No. 760 of 1966 and Petition for Special Leave to appeal (civil) No; 676 of 1972, 912 V. M. Tarkunde, J. P. Goyal; and Sobhag Mal Jain, for the appellant. E. C. Agarwala and A. T. M. Sampat, for respondent No. 2. The Judgment of the Court was delivered by Dua,J. The following dispute between M/s. Bijli Cotton Mills (P) Ltd., and their workmen was referred to the Industrial Tribunal 11, U.P. for adjudication : "Should the employers be required to pay wages for the festival holidays allowed to their workmen in a year ? If so, from which date and with what other details ? According to the workmen the employers had been giving 17 festival holidays to their workmen in a year and though those holidays should have been paid ones the employers were not making any payment. The dispute was originally espoused at the instance of Hathras Mazdoor Panchayat but later three other unions namely Sooti Mill Mazdoor Panchayat, Congress Mazdoor Sangh and Suti Mill Karmachari Sangh were also accorded right of representation on their applications. The employer mills contested the claim on various grounds. The plea on the merits in substance was to the effect that neither in law nor in practice was there any provision for festival holidays with wages. The Mill, it was averred, was already paying was for three holidays allowed to the workmen under the U.P. Industrial Establishments (National Holidays) Act (U.P. Act XVIII of 1961) and in the entire Agra region in which this Mill is situated to textile mill pays wages for festival holidays. It was added that the Mill was an uneconomic unit and was not in a position to bear any extra burden. The Congress Mazdoor Sangh, the Sooti Mill Karmachari Sangh and the Hathras Mazdoor Panchayat filed separate written statements on behalf of the workmen and pleaded that the grant of holidays without wages was illegal and against social Justice. The employer Mill filed rejoinder statement to the written statements of all the Unions, pleading that the holidays mentioned by the Unions were not allowed to the workmen at the employer ', initiative but were _granted because the workmen demanded the same and these holidays were substituted by other days in lieu of holidays, and as they were paid for the days on which they worked on account of these holidays there was no Toss of wages caused to the workmen. On july 15, 1965 the parties made their statements under,r. 12 of the U.P. Industrial Disputes Rules, 1957, which provides 913 for procedure at first. sittings of die Tribunal requiring the parties to state their respective cases. Shri M. P. Jaiswal, on behalf of the employers admitted that the company gives 17 festival holidays to all its employees, 15 of which are; those mentioned in the written statement of the Congress Mazdoor Sangh and two others being Sankranti and Baldev Chat observed on Bhadon Sukla Chat. All these holidays were stated by him to be paid holidays in the sense that the workers were allowed to work on their unpaid rest days in substitution of the said festival holidays. The unpaid rest days were the. same as those provided and observed under section 52 of the Factories Act as unpaid holidays. It was admitted that the monthly raters were paid for 365 days in a year whereas piece raters were paid according to the quantum of work done by them on working days in a month. The national holidays given by the employer are not substituted on any rest day and if any national holiday falls on a rest day the employer pays single day 's wages if no work is done. If a holiday is substituted on rest day then only one day 's wages are paid. After this statement four representatives of the contesting unions stated that whenever the management takes work, from the workers on a rest day only one day 's wages are paid and it was emphatically denied that holidays were substituted on a rest day. Monthly raters, according to these representatives, get their wages for all 365 days. After these statements the Presiding Officer of the Tribunal put the following question to Shri Jaiswal : Q : Whether the festival holidays observed in the Mill are paid or unpaid ? A : They are paid holidays and payment is made by substitution as stated earlier. Thereafter it appears that the workmen did not lead any evidence but Shri M. P. Jaiswal, Secretary of the Mills appeared as a witness on behalf of the employer. He filed two charts showing the festival holidays observed in ,he Mills in the year 1964 and upto July, 1965. He proved these charts stating that they bad been prepared from the Mills ' Muster Rolls and that they were true copies correctly prepared from the records of the Mills. These two charts were marked as exhibit E 1 and exhibit E 2. )When the witness tried to depose about the holidays in the Kanpur Textile Mills, the question was disallowed. While cross examined by Shri B. D. Seth, on behalf of the workmen, Mr. Jaiswal stated that in Ex E 1 only two holidays for Holi were substituted, one on February 23, 1964 and the other on March 1, 1964, the remaining two not being substituted. In the case of Diwali also. two holidays were 914 substituted leaving unsubstituted the remaining two holidays. On being" cross examined by Shri O.P. Gautam also on behalf of the work men the witness stated that in 1965 as well only two holidays on account of Holi were substituted, the remaining two being un substituted. In the preceding years also the position was stated to be the same in regard to Holi holidays. The following :two questions and answers may also be re produced Q : When you take work on Sunday which is a weekly holiday on which date you give the festival holiday ? A : As such we do not give the weekly rest day on the day on which the festival falls within the limits allowed under the Factories Act. 0 : Is there any limit for festival holidays in Factories Act ? A : There is no such limit nor any such direction in the Factories Act. For substitution there is a restriction in Sections 51 and 52 of the Factories Act. Exhibits E 1 and E 2 show festival holiday for the year 1964 and 1965 and these charts corroborate the answers elicited from Shri Jaiswal that for Holi and Diwali only two days on which substitution was allowed were paid for, the remaining two holidays being unpaid. It may be pointed out that ;the Tribunal, after the statements of the parties under r. 12, framed the following issue : "Whether the festival holidays are given to the work . men in the form of substituted holidays on weekly rest days ? If so are the workmen other than the monthly raters entitled to only one day 's wages or two days ' wages i.e., one day 's wages for the work done on the weekly rest day and one day 's wages for the substituted holiday ?" It appears that the language of this issue was not objected to by either party and this appears to be the real crux of the controversy which emerged after the statements of the parties requiring decision by the Tribunal. It was not disputed before the Tribunal that the employers had been giving 17 festival holidays to all the workmen besides three national holidays. The plea taken by the employers in their pleadings that the holidays are not paid holidays was in the opinion of the Tribunal given the go by in the 915 statement of Shri Jaiswal recorded under r 12 on. July 15, 1965. The Tribunal then dealt with that statement and observed that after that statement it was for the, employers to show how payment for the festival holidays Was made by them. To reproduce the words of the award : "In the written statement without stating whether the festival holidays were paid or unpaid they pleaded that neither in law nor in practice there was any provision for festival holidays with wages and that in the entire Agra Region no textile mill was paying wages for the festival holidays. Originally it appeared that the employers wanted to set up that the festival holidays were unpaid but at the time of the statement under rule 12, Shri Jaiswal took a contrary position and stated that all the festival holidays were paid holidays and the payment was made in the sense that they were substituted on rest days. I have already shown how this statement is in correct and no impartial mind will be wrong in drawing a legitimate inference that the purpose of the employers in setting up inconsistent pleas or in giving in consistent statements was only to conceal the truth or it may be that the purpose was to confuse the issue. " A little lower down, after observing that Shri Jaiswal was not the kind of witness who would give straight answers to straight questions and that the witness had to be warned for this attitude observed : "From the employers own pleadings the statement of Shri Jaiswal recorded under rule 12 and his deposition, it is evident that 17 festival holidays besides three National Holidays are all paid holidays but the employers had been wrongfully depriving their workmen of their dues in this behalf." The Tribunal, while dealing with the case of monthly raters observed that they were not entitled to the relief because they were paid for all the 365 days in a year. The case of daily raters or piece raters being different (they were paid according to the number of days on which they worked or the quantum of work thev turned out) they were held entitled to festival holidays with wages. Daily raters were accordingly held entitled to payment on the basis of their daily wage whereas piece raters were held entitled to get the average earning to be calculated on the basis of the average of the last one month immediately preceding the holiday. The relief granted. by the award was stated thus "My award, therefore is that the employers shall pay wages to their daily rated and piece rated Workmen 946 for 17: festival holidays besides, three National Holidays, i.e., to each or their workmen who: are daily raters and piece raters with effect, from, the 1st January, 1965. For the holidays which have accrued, from the 1st January 1965 fill the date of enforcement of the award and ' which are. given in the list exhibit E 2 the employers shall pay the arrears and in future all the. festival ' holidays and National Holidays shall be paid for. If the employers substitute festival holidays on a rest day, for that day they shall. pay double the wages. " The appellant, feeling aggrieved by this award, presented a writ petition in the Allahabad High Court under article 226 of the Constitution complaining that the Industrial Tribunal had misread ' and misinterpreted the statement of the parties recorded under r. 12 particularly the statement of Shri Jaiswal. It was also averred that the question of festival holidays depends on so many other factors particularly custom and usage and the Industrial Tribunal had committed a serious error in shutting out evidence in regard to the practice prevalent at Kanpur in respect of the custom and usage regarding festival holidays in the textile industry there. The main textile industry in the State of Uttar Pradesh according to the appellant 's averment is concentrated at Kanpur. The alleged admission by Shri Jaiswal contrary to the appellant 's pleading and contrary to the case set up by both parties could: not be conclusive and the Industrial Tribunal illegally based its finding on such alleged admission. The High Court dismissed the writ petition holding that it was open to the Industrial Tribunal to allow or disallow any question which it considered relevant or irrelevant and the High Court, in exercising its jurisdiction under article 226 of the Constitution, could not go into the correctness or otherwise of the order disallowing a particular question to be put to a witness such function being vested only in an appellate court. The grounds that the Industrial Tribunal, had misread the statement of Shri Jaiswal in holding that, he had made an admission that 17 paid festival holidays were being allowed to the workmen was also considered to be impermissible in the High Court in writ jurisdiction because that pertains to the appreciation of evidence. The statement made by Shri Jaiswal under r. 12, according to the High: Court, was capable of the interpretation that it contained an admission that the employers were giving 17 paid festival holidays to their workmen. Not being satisfied that three impugned award suffered from any error of jurisdiction or from any manifest, error of law the writ petition was dismissed. Special appeal form the judgment of the learned single Judge to a Bench of two Judges was summarilly dismissed, on, December 917 5, 1966, However, leave to appeal to this Court was granted by the Divisional Bench on February, 16,1968, the petitioner having been held, to. quote the words of the High Court "entitled to a certificate. either under cl. (a) or, (b), of article 13 3 ( 1) of the Constitution". The High Court also, certified "that the value of the subject matter of dispute before the High Court and in appeal is not less than Rs. 20,000/ ; alternatively, it is certified that the judgment of this Court involves directly or indirectly a claim res pecting wages amounting to more than Rs. 20,000/ . ", Before, us the respondents raised, an objection that the certificate granted ' by the High Court was incompetent and, therefore, should be cancelled. Out attention was drawn to article 133(1),(a) and (b) of the Constitution and it was pointed out that the High Court missed that part of sub article 133(1) where it is stated that " where the judgment, decree or final order appealed from affirms the decision of the court immediately below in any case other than a case referred to in sub clause (c), if the High Court further certifies that the appeal involves some substantial question of law. " Merely because the value of the subject matter in dispute is more than Rs. 20,000/ , the respondent contended, it does not by itself justify the grant of a certificate under cl. (a) or cl. In the application for the requisite certificate the prayer included cl. (c) of article 133(1) as well, but apparently at the time of arguments the submission was confined to cls. (a) and (b) alone. The appellant, when faced with this difficulty, submitted that this Court should, on its oral request, grant special leave to appeal after condoning delay and it also filed a formal written application for special leave to appeal accompanied with an application for condonation of delay. For adopting such a course the appellant relied on an unreported decision of this Court in The District Board (afterwards Zila Parishad), Allahabad vs Syed Tahir Hussain & ors.(1) There the appellant had come to this Court on a certificate purporting to have been granted under article 133 of the Constitution. At the time of hearing it was objected on behalf of one of the respondents there that the certificate could only be granted if there was a substantial question of law and since the certificate did not disclose on its face the existence of any such question, the appeal was incompetent. This Court, in view of its earlier decision in Shri Durga Prasad & anr. vs The Banaras Bank Ltd.(2), sustained this objection and in the absence of a certificate of the High Court showing the existence of some substantial question of law held the appeal to be incompetent. The appellant in, that case when faced with a similar situation, had made an oral request praying for special leave, undertaking to. file a written (1) C.A. No; 578 of 1963 decided on July 23,1965. (2) [1964] 1 S.C.R. 475. 918 petition for that purpose supported by an affidavit and accompanied by an application for condonation of delay. This Court considered the case to be fit and proper for granting special leave which granted on oral prayer but the appellant there Ws directed to file special leave petition in this Court within a week. The appellant in the present case also filed during the course of hearing special leave petition No. 676 of 1972 duly supported by an affidavit and Civil Miscellaneous Petition No. 1319 of 1972 with a supporting affidavit praying for (i) condonation of delay, (ii) treating court fee paid on C.A. No. 1611 of 1968 as court fee on special leave to appeal and (iii) the security deposit. in the earlier appeal being treated as security in the special leave appeal. We heard all the matters together. We consider the case to be covered by the precedent cited and accordingly held the certificate granted by the High Court to be incompetent and, therefore, liable to be cancelled. With the cancellation of the certificate C.A. No. 1611 of 1968 must be dismissed; but in the circumstances there would be no order as to costs. With regard to the prayer for granting special leave to appeal there can be no dispute that this Court is fully competent to entertain this prayer and if the cause of justice so demands, to grant the same and consider the special leave to, appeal on the merits. Article 136 is couched in very wide terms and it vests this Court with discretionary power for setting right grave injustice in fit cases. In Shri Durga Prasad 's case (supra), this Court, having regard to all the circumstances, did not consider that to be a fit case for granting special leave to appeal whereas in the later case of the District Board (afterwards Zila Parishad) Allahabad (supra), it may be recalled, this Court granted special leave to appeal on oral request, directing, that a formal special leave application be filed within a week. After considering all the circumstances we consider the present case to be fit for granting special leave to appeal and for condoning the delay. We order accordingly. The appellant, however, must pay full court fee payable within two weeks but the security already deposited in C.A. No. 1611 of 1968 may be treated as security in the special leave appeal. The result, therefore, is that now we have the fresh appeal by special leave before us for decision. The appellant 's learned counsel drew our attention to the statements of the respective cases of the parties before the Industrial Tribunal and also to the statement of Shri Jaiswal under r. 12. In our view the statement of Shri Jaiswal had, as a matter of law, to be read as a whole and also in the back ground and along with the pleadings as disclosed in the respective statements of cases of the parties in order to understand whether Shri Jaiswal 's statement 919 amounted to, a clear and conscious admission eliminating a crucial, part of the controversial issue. Reading them as ' a whole we do not consider it possible to hold that the appellant had admitted ,that the 17 festival holidays were being given by. them as paid ' holidays dispensing with the enquiry into the question referred for adjudication to the industrial Tribunal. It may in this connection be pointed out that the real purposes and object of r. 12 is only to pinpoint the precise. controversy by requiring the, parties to state their respective cases at the very first sitting of the Tribunal. This statement is not like the testimony of a witness, part Of which can be accepted and thereat rejected. 11 was only in the nature of a supplementary pleading designed mainly to remove vagueness and to clear ambiguities or indefiniteness in the pleadings. This statement had, therefore, to be read and considered as a whole. If it was considered unsatisfactory in some respects this factor could be taken into account in appreciating the pleadings and evidence led in the case while coming to the final decision but it could not debar the appellant from leading evidence on the controversial issue as if such issue did not arise. It is noteworthy that even the workmen did not plead that the festival holidays were (treated as paid holidays but no payment was as. a matter of fact being made. The holidays were of course allowed to the workmen but the written statement on behalf of the appellant unequivocally denied that there was any provision in law or practice for allowing festival holidays with wages and it also denied that in the Agra region where the appellant 's mill is situated any textile mill was paying wages for festival holidays. The appellant Mill it was emphasised could not be treated on a different footing. It was further pointed out that the appellant Mill was a highly uneconomic mill an, , was not in a position to take any extra burden. The statement made by Shri Jaiswal under r. 12 could on no reasonable hypothesis be considered to have replaced this unequivocal and clear plea. It is true that Shri Jaiswal tried to be somewhat clever by stating that the festival holidays were paid in the sense that the workers were allowed to work on unpaid rest days in substitution of the said festival holidays. But this statement clearly explains in unambiguous terms the sense in which Shri Jaiswal meant to say that the festival holidays were paid. The facts contained in the explanation lead to the only conclusion that festival holidays are not paid as 'the National Holidays are. This statement read with the detailed explanation which constitutes its real core could not logically serve as a ground for ignoring the unequivocal denial in the written statement particularly when even the workmen did not set up this case. The Industrial Tribunal had, in our opinion, erroneously 92O ignored the real plea and had on the basis of this manifest blatant error, which is clear on the face of the record, disallowed the evidence on the question of the practice and custom. in the textile 'industry in Kanpur. In Shri Jaiswal 's statement we find a clear distinction drawn that three National Holidays were paid holidays and the other festival holidays were such for which the workers were allowed to work on substituted rest days. It was also clearly mentioned in that statement that if a holiday is substituted on a rest day then the workmen gets only one day 's wages. This important part of the statement was virtually ignored by the Tribunal. The facts being clearly stated, in our view, the Industrial Tribunal was wrong in law in holding that the appellant 's written plea was modified by reason of the statement under r. 12 or that there was a clear admission superseding the earlier plea. The learned Single Judge of the High Court, in our opinion, also missed the real point; and if the real plea was ignored and it was erroneously held that Shri Jaiswal 's statement under r. 12 constituted an admission overriding the earlier plea and as a result evidence on that plea was excluded, then it was an eminently fit case for interference under article 226 of the Constitution, the error being gross and palpable which was manifest on the face of the record and the same having resulted in failure of justice by excluding evidence on the mos vital point. The Division Bench on special appeal from the judgment of the learned single Judge fell into the same error in summarily dismissing the appeal in limine without even recording a speaking order on the crucial point of substance arising in the case which went to the root of the matter. The question of festival holidays requires consideration from several aspects. Employers and workers have always differed in their suggestions about the level at which uniformity in the number of holidays should generally be achieved. In the Report of ,the National Commission on Labour prepared in August, 1969 we find at p. 105 that the workers ' organisaitions generally favour a minimum of 7 to 12 paid holidays in a year without mainly any differentiation as between different categories of employees. Enployers, on the other hand, feel that the number of paid holidays enjoyed by workers in India is already on the high side, and, 'therefore, uniformity should be achieved at a much lower level. The opinion of the Commission contained, in its Report supported the view of its Study Group on Labour Legislation which recomended three paid National Holidays viz. 26th January (Republic Day, 15th August (Independence Day) and 2nd October (Mahatma Gandhi 's Birth Day) and five paid festival holidays as may be fixed by the appropriate Government in consultation with the representatives, of employers and employees. The Report also suggests that there is a trend towards industry wise uniformity in 921 the matter of holidays, as in the case of jute and coal. Incidentally it may be mentioned that in U.P., the U.P. Industrial Establishments (National Holidays) Act No. XVIII of 1961 and rules made under section 9 thereof provide for paid National Holidays but that Act does not deal with festival holidays. In the case before us, according to the appellant, the 17 festival holidays as directed by the award would impose on the appellant industry an additional burden to the extent of about Rs. 1,49,600 as was stated in the order of the Allahabad High Court while granting leave. Custom, practice and uniformity in the industry without prejudicially affecting efficiency and increased production are some of the relevant factors which have to be taken into account in determining the number of paid festival holidays per year. The question affects national economy and the present instance may well be cited in future in deciding similar questions in other allied concerns in the region. The effect of such instances, therefore, does not remain confined only to the establishment concerned but has its impact on other concerns as well. This aspect has been completely ignored by the Industrial Tribunal which has proceeded solely on the basis of the statement of Shri Jaiswal as interpreted by it. This statement being the sole basis of the Tribunal 's conclusion if it is not possible to read in this statement any admission having the effect of giving up the only crucial plea that the workmen have no right to 17 paid holidays than this is clearly a misreading of that statement and the Tribunal 's order must be held to be tailed by a manifest error of law on the face of the record which has resulte in grave failure of justice as evidence on the only material point in issue was illegally shut out. In our view, the High Court also fell into the same error and did not apply its mind to the real point which arose for decision in the case. We accordingly allow this appeal, set aside the orders of the High Court and of the Industrial Tribunal and remit the case back to the Tribunal for a fresh decision on the merits after permitting the parties to lead relevant evidence in accordance with law and in the light of the observations made above. As the whole trouble arose because of the unsatisfactory nature of the statement made by Shri Jaiswal, who was also found by the Tribunal as a person who was not inclined to give straight answers to straight questions, it is only just and proper that the appellant should pay the respondents ' costs both in this Court and in the High Court. The court fee, as already directed, must be paid by the appellant within two weeks.

An industrial dispute arose between the appellant and its workmen as to 'whether the employers were required to pay wages for the festival holidays allowed to their workmen in a year. The appellant contested the workmen 's claim mainly on the grounds that neither in law nor in practice was there any provision for festival holidays with wages, that the appellant was already paying wages for three holidays allowed to the workmen under the U.P. Industrial Establishment (National Holidays) Act, 1961 and that in the entire region in which this mill is situated, no textile mill pays wages for festival holidays. The mill was stated to be an uneconomic unit and, therefore, not in a position to b@r an extra burden. The workmen, on the other band, in their separate written statements, filed through three Unions. pleaded that the grant of holidays without wages was illegal and against social justice. In their rejoinder the appellant pleaded that the holidays mentioned by the Unions were (,ranted because the workmen had demanded the same and those holidays were substituted by other days in lieu of holidays and as they were paid for the days on which they worked on account of those holidays there was no loss of wages caused to them. The Tribunal by its award made the appellant liable to pay to their daily rated and piece rated workmen for 17 festival holidays, besides three national holidays, plus arrears, on the ground that the Secretary of,the appellant mill admitted that the festival holidays were paid holidays in the sense that workers were allowed to work on their unpaid rest days in substitution of the said festival holidays. The appellant being aggrieved by the award presented a writ petition before the High Court which was dismissed by a single Judge. Special leave to a Divisional Bench of the High Court was dismissed in Iimine, but the Bench certified the case to be fit for appeal to this Court. The appellant was held entitled ' to certificate either under cl. (a) or cl. (b) of article 133(1) of the Constitution on the ground that value of the subject matter of dispute or claim The respondent in the Supreme Court objected to the competence of the certificate on the ground that though the judgment of the Division Bench was one of affirmance the certificate did not disclose on its face the existence 'of any substantial question of law. This objection was upheld but as the case was considered fit for special leave, on oral request special leave was granted on the condition that the appellant would file a formal application for special leave accompanied by an application for condoning the delay 911 Allowing the appeal on the merits, HELD : By reading the statement of the Secretary of the appellant along with the pleadings as disclosed in the respective statement of cases of the parties, it is not possible to bold that the appellant had admitted that the 17 festival holidays were being given by them as paid holidays dispensing with the enquiry into the question referred for adjustment to the Industrial Tribunal. Even the workmen did not plead that the festival holidays were treated as paid holidays. The Secretary 's statement that no festival holidays were paid in the sense that the workers were allowed to work on unpaid rest days in substitution of the said festival holidays. This statement clearly explains that sense in which the Secretary meant to say that the festival holidays were paid. The facts contained in the explanation lead to the only conclusion that festival holidays are not paid as the festival holidays are. This statement read with the detailed explanation could not logically serve as a ground for ignoring the unequivocal denial in the written state ment. The industrial Tribunal, was therefore, wrong in holding that the statement made by the Secretary was an admission on behalf of the appellant. The learned single Judge also missed the real point and held that the Secretary 's statement constituted an admission and all 'facts evidence was therefore, excluded. The Division Bench fell into the, same error in summarily dismissing the appeal in limine. (920 A EJ (ii) The U.P. Industrial Establishments (National Holidays) Act, 1961 and rules provide for paid National Holidays but that Act dotes not deal with festival holidays. In determining the number of paid festival holidays per year, certain facts, like custom, practice and uniformity in the industry without prejudicially affecting efficiency and increased produCtion are some of the relevant factors to be taken into account. The question affects national economy and does not remain confined only to the establishment concerned but has its impact on other concerns as well. This aspect has been completely ignored by the, Industrial Tribunal. Further the Tribunal proceeded solely on the basis of misreading of the Secretary 's statement. thereby ignoring the plea taken by the appellant. There is. thus the manifest error of law apparent on the fact of the record which resulted in grave failure of justice, because evidence on the only material point was illegally shut out. [921 A] The District Board (afterwards Zila Parishad Allahabad vs Syed Tahir Hussain & ors C.A. No. 57 8 of 1963 decided oh July 23, 1965, Shiri Durga Prasad & Anr. vs The Banaras Bank Ltd., [1964] 1 S.C.R.475.preferred to.

Civil Appeal No. 24 of 1959. Appeal by special leave from the Award dated September 18, 1957, of the Industrial Tribunal, Delhi, in 1. D. No. 3 of 1957. H. N. Sanyal, Additional Solicitor General of India, Vidya Sagar and B. N. Ghosh, for the appellant. Frank Anthony and Janardan Sharma, for the respondents. April 4. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave arises from an industrial dispute between the appellant, Assam Oil Company Ltd., and the respondent, its workmen. The dispute was in regard to the termination of services of Miss P. Scott, one of the employees of the appellant. The respondent alleged that the said termination of Miss Scott 's services was illegal and that was one of the points referred to the Industrial Tribunal, New Delhi, for its adjudication. The other point of dispute between the parties was in regard to the quantum and conditions of the payment of bonus for the year 1955 56 to the appellant 's workmen. The industrial tribunal has directed the appellant to reinstate Miss Scott and to pay her all the back wages from the date of her dismissal until the date of her reinstatement. It has also ordered that Miss Scott should be paid bonus for the two years in question as specified in the award. The direction for the payment of bonus is not challenged by the appellant; but the validity of the order asking the appellant to reinstate Miss Scott and to pay her the whole of the back wages during the relevant period is questioned before us, and so the main point which calls for 459 our decision is whether the appellant was justified in terminating the services of Miss Scott, and if not, whether in the circumstances of this case it would be appropriate to direct an order of reinstatement ? The appellant company is chiefly engaged in searching for and refining crude oil and it has a refinery at Digboi in Assam. At New Delhi it has a small office with 3 or 4 employees. Miss Scott was originally in the employment of M/s. Burmah Shell, New Delhi, as a lady secretary. Her services were lent to the Delhi representative of the appellant company sometime in January, 1954. In September, 1954, the appellant set up its own office at New Delhi and then offered Miss Scott direct employment on the same terms and conditions that governed her employment with M/s. Burmah Shell. Miss Scott then resigned her service from M/s. Burmah Shell and joined the appellant as a regular employee in October, 1954. Her appointment was subsequently confirmed on September 1, 1955, on terms and conditions which were communicated to her and which she accepted. One of the terms was that the appointment in question may be terminated on one month 's notice on either side. During the course of her employment Miss Scott did not give satisfaction to the appellant and on many occasions she was verbally warned to improve her work and not to repeat her lapses. On February 26, 1957, Mr. Gowan, the Delhi representative of the appellant, warned Miss Scott in writing about her lapses and added that he did not consider her work satisfactory. He told her to strive to improve her work and mend matters failing which he would have to consider whether she was suitable to continue in the appellant 's employment. On February 28, 1957, the services of Miss Scott were terminated by Mr. Gowan and she was told that the faults pointed out to her had not been corrected and that her performance during her service had not matched up to the standard required. Miss Scott was given one month 's pay in lieu of notice and she accepted it. At the time when her services were terminated Miss Scott used to receive the total remuneration of Rs. 535 per month. 460 On March 13, 1957, Miss Scott made a representation to the Conciliation Officer, New Delhi, against the termination of her services, and it is out of the proceeding. , taken by the Conciliation Officer on this representation that the present dispute ultimately came to be referred to the industrial tribunal for adjudication. The union of the appellant 's workmen which sponsored her case alleged before the tribunal that the termination of Miss Scott 's services was wrongful and illegal and she was entitled to reinstatement. It was urged on her behalf that no enquiry was held by the appellant before terminating Miss Scott 's services and that made the impugned termination illegal and unjustified. A claim for bonus for the years 1955 and 1956 was also made on her behalf. The appellant resisted this claim. It was urged by the appellant that the dispute was an individual dispute and as such the reference was incompetent. It was alleged that Miss Scott was not a workman under section 2(s) of the (hereinafter called the Act), and so the tribunal had no jurisdiction to deal with the dispute. On the merits the appellants case was that it had purported to terminate the services of Miss Scott in terms of the contract after paying her one month 's wages in lieu of notice, and that the industrial tribunal would not be justified in interfering with such an order. The tribunal has held that Miss Scott was a workman under section 2(s) and since the union had sponsored her cause the dispute was an industrial dispute under section 2(k) of the Act. According to the tribunal the termination of Miss Scott 's services in substance amounted to dismissal for misconduct, and since no, enquiry had been held it was illegal and unjustified. On the merits the tribunal took the view that even if Miss Scott had been guilty of some negligence the punishment of dismissal was unduly severe. The tribunal also observed that in dismissing her Mr. Gowan was influenced by the consideration that Miss Scott had become a member of the union and that was substantially responsible for her dismissal. It is on these findings that the tribunal has passed an order of reinstatement. 461 In the present appeal the learned Additional Solicitor General has raised two points before us. He contends that the appellant has terminated the services of Miss Scott in pursuance of the terms of the contract and an order of discharge passed strictly according to the contract cannot be questioned before the industrial tribunal. Alternatively he argues that even if the order of discharge is found to be unjustified because no enquiry was held the whole evidence relating to the alleged misconduct of Miss Scott has been led before the tribunal and in the light of the said evidence the order of discharge should not have been interfered with and reinstatement should not have been ordered. At the highest it may be a case for awarding com pensation and no more. The other findings recorded by the tribunal against the appellant have not been challenged in the present appeal. The wide scope of the jurisdiction of industrial tribunals is now well established. As early as 1949 it was held by the Federal Court in Western India Automobile Association vs Industrial Tribunal, Bombay (1) that the argument based upon the sanctity and the validity of contracts between the employer and the employees it overlooks the fact that when a dispute arises about the employment of a person at the instance of a trade union or a trade union objects to the employment of a certain person, the definition of industrial dispute would cover both those cases. In each of those cases, although the employer may be unwilling to do so, there will be jurisdiction in the tribunal to direct the employment or non employment of the person by the employer. This is the same thing as making a contract of employment when the employer is unwilling to enter into such a contract with a particular person ". It was also observed that the industrial tribunal " can direct in the case of dismissal that an employer or employee shall have the relation of employment with the other party, although one of them is unwilling to have such relation " (p. 337). In other words, the jurisdiction of the industrial tribunal to direct reinstatement of a discharged or dismissed employee is no longer in doubt. That being the nature and extent of the juris (1) , 336, 59 462 diction of the industrial tribunal it is too late now to contend that the contractual power of the employer to discharge his employee under the terms of the contract cannot be questioned in any case. If the contract gives the employer the power to terminate the services of his employee after a month 's notice or subject to some other condition it would be open to him to take recourse to the said term or condition and terminate the services of his employee ; but when the validity of such termination is challenged in industrial adjudication it would be competent to the industrial tribunal to enquire whether the impugned discharge has been effected in the bona fide exercise of the power conferred by the contract. If the discharge has been ordered by the employer in bona fide exercise of his power then the industrial tribunal may not interfere with it; but the words used in the order of discharge and the form which it may have taken are not conclusive in the matter and the industrial tribunal would be entitled to go behind the words and the form and decide whether the discharge is a discharge simpliciter or not. If it appears that the purported exercise of the power to terminate the services of the employee was in fact the result of the misconduct alleged against him then the tribunal will be justified in dealing with the dispute on the basis that despite its appearance to the contrary the order of discharge is in effect an order of dismissal. The exercise of the power in question to be valid must always be bonafide. If the bona fides of the said exercise of power are successfully challenged then the industrial tribunal would be entitled to interfere with the order in question. It is in this context that the industrial tribunal must consider whether the discharge is mala fide or whether it amounts to victimisation or an unfair labour practice, or is so capricious or unreasonable as would lead to the inference that it has been passed for ulterior motives and not in bona fide exercise of the power conferred by the contract. In some cases the employer may disapprove of the trade union activities of his employee and may purport to discharge his services under the terms of the contract. In such cases, if it appears that the real reason 463 and motive for discharge is the trade union activities of the employee that would be a case where the industrial tribunal can justly hold that the discharge is unjustified and has been made mala fide. It may also appear in some cases that though the order of discharge is couched in words which do not impute any misconduct to the employee, in substance it is based on misconduct of which, according to the employer, the employee has been guilty; and that would make the impugned discharge a punitive dismissal. In such a case fairplay and justice require that the employee should be given a chance to explain the allegation weighing in the mind of the employer and that would necessitate a proper enquiry. Whether or not the termination of services in a given case is the result of the bona fide exercise of the power conferred on the employer by the contract or whether in substance it is a punishment for alleged misconduct would always depend upon the facts and circumstances of each. In this connection it is important to remember that just as the employer 's right to exercise his option in terms of the contract has to be recognised so is the employee 's right to expect security of tenure to be taken into account. These, principles have been consistently followed by industrial tribunals and we think rightly (Vide: Buckingham and Carnatic Company Ltd. vs Workers of the Company (2). Therefore we are not prepared to accede to the argument urged before us by the learned Additional Solicitor General that whenever the employer purports to terminate the services of his employee by virtue of the power conferred on him by the terms of contract, industrial tribunals cannot question its validity, propriety or legality. In the present case there is no doubt that the order of discharge passed against Miss Scott proceeds on the basis that she was guilty of a misconduct. As we have already pointed out Mr. Gowan communicated to her what he thought were grave defects in her work and in the letter of discharge itself the same allegations are made against her. That being so, it must be held that the discharge in the present case is (2) [1952) L.A.C. 490. 464 punitive. It amounts to a punishment for alleged misconduct and so the tribunal was right in holding that the appellant was not justified in discharging Miss Scott without holding a proper enquiry. It, however, appears that evidence has been led by the appellant before the tribunal in support of its case that Miss Scott was guilty of dereliction of duty on several occasions which justified her dismissal. Mr. Gowan has given evidence about the quality and standard of Miss Scott 's work and he has sworn that a long series of instances of bad work and failure to carry out orders, insolence and untruthfullness had come to his notice. On one occasion the letter typed from a draft had been incorrectly typed and more than a complete paragraph had been omitted, and in addition Miss Scott told him that she had checked the letter. According to Mr. Gowan she was disobedient to him and he had occasion to warn her verbally several times in the past. It is true that Mr. Gowan has also stated that he knew that Miss Scott had become a member of the union and he thought that a person who was holding a confidential position in his office should not have become a member of the union. The evidence given by Mr. Gowan on the whole appears to be straightforward and it leads to two con clusions: (1) that Mr. Gowan was thoroughly dissatisfied with the work of Miss Scott, and (2) that he did not approve of Miss Scott 's conduct in joining the union. Since the latter circumstance has at least partially weighed in the mind of Mr. Gowan in terminating the services of Miss Scott it must be held that the said termination is not justified. It would not be open to an employer to dismiss his employee solely or principally for the reason that he or she had joined a trade union. That is a fundamental right guaranteed to every citizen in this country and it would be idle for anybody to contend that the mere exercise of the said right would incur dismissal from service in private employment. Therefore we are prepared to accept the finding of the tribunal that the dismissal of Miss Scott is not justified. That raises the question as to whether reinstatement can be ordered in the present case. There is no doubt 465 that the normal rule is that in cases of wrongful dismissal the dismissed employee is entitled to reinstatement ; but there can be cases where it would not be expedient to follow this normal rule and to direct reinstatement. In the present case the appellant 's office is very small and Miss Scott undoubtedly occupied a position of some confidence with Mr. Gowan. The warnings given by Mr. Gowan to Miss Scott from time to time clearly bring out his dissatisfaction with her work, and if Mr. Gowan has sworn that he has lost confidence in Miss Scott it would be unfair to hold that the loss of confidence is due solely or substantially because Miss Scott joined the union of the appellant 's workmen. It is no doubt true that the effect of the employer 's plea that he has lost confidence in the dismissed employee cannot ordinarily be exaggerated; but in the special circumstances of this case we are inclined to hold that it would not be fair either to the employer or to the employee to direct reinstatement. It appears that subsequent to her dismissal and in spite of it Miss Scott found employment with Parry & Company and Nestles Products (India) Ltd., between May 19, 1958 to October 31, 1958 and December 1, 1958 to November 30, 1959, respectively. The first of the said two companies paid her Rs. 500 per month except for October when she was paid Rs. 525 and the latter company has paid her Rs. 500 per month except for November when her salary was Rs. 525 and for December and January when she was paid Rs. 15 per day. Besides she has received from the appellant Rs. 2,700 as subsistence allowance during the pendency of the present appeal. We are, therefore, satisfied that it would be fair and just to direct the appellant to pay a substantial amount of compensation to her. The learned Additional Solicitor General has agreed to pay Rs. 12,500 in addition to Rs. 2,700 which have been already paid to her as subsistence allowance. We think that in the circumstances of this case the amount of Rs. 12,500 represents a fair amount of compensation on the payment of which the order of reinstatement passed by the tribunal should 466 be set aside. We would accordingly set aside the order of reinstatement and direct that the appellant should pay to Miss Scott Rs. 12,500 as compensation. The order in respect of bonus has not been challenged and is confirmed. There will be no order as to costs. Appeal partly allowed.

One S was employed by the appellant as a secretary and one of the terms of employment was that the appointment may be terminated on one month 's notice on either side. The appel lant was thoroughly dissatisfied with the work of S and dis approved of her conduct in joining the union. Purporting to act under the contract, the appellant terminated the services of S and gave her one month 's pay in lieu of notice. No enquiry was held by the appellant before terminating the services of section The industrial tribunal held that the termination of services amounted to a dismissal for misconduct and since no enquiry was held it was illegal and unjustified and it passed an order for the reinstatement of section The appellant contended that as the termination was strictly in accordance with the terms of the contract it could not be challenged before an industrial tribunal, that even if no enquiry was held the order of discharge was justified as the evidence led before the tribunal established the misconduct of S and that at the highest it was a case for awarding compensation and not for reinstatement: Held, that the discharge amounted to punishment for alleged misconduct and was unjustified in the absence of a proper enquiry. Even where the discharge was in exercise of the power under the contract it was competent for the tribunal to enquire whether the discharge had been effected in the bona fide exercise of that power. If the tribunal found that the purported exercise of the power was in fact the result of the misconduct alleged then it would be justified in dealing with the dispute on the basis that the order of discharge was in effect an order of dismissal. Western India Automobile Association vs Industrial Tribunal, Bombay, , followed. 458 Held, further, that in the circumstances of the present case compensation and not reinstatement was the appropriate relief that should have been awarded. The normal rule was that in cases of wrongful dismissal the dismissed employee was entitled to reinstatement but there could be cases where it would not be expedient to follow the normal rule. In the present case the appellant 's office was a small one and S occupied a position of some confidence. The appellant was dissatisfied with the work of S and had lost confidence in her. In such a case it would not be fair either to the employer or the employee to direct reinstatement.

iminal Appeal No. 25 of 1954. Appeal under Article 134(1) (c) of the Constitution from the judgment and order dated the 12th January 1954 of the Patna High Court in Criminal Miscellaneous Case No. 10 of 1953. M. C. Setalvad, Attorney General of India and Mahabir Prasad, Advocate General of Bihar (Balbhadra Prasad Sinha and P. G. Gokhale, with them) for the appellant. Purshottam Prikamdas, (R. Patnaik, with him) for the respondent. November 8. The Judgment of the Court was delivered by BHAGWATI J. This appeal with certificate under article 134(1)(c) of the Constitution arises out of an application under section 2 of the Contempt of Courts 121 956 Act (XXXII of 1952) and section 8 of the (XXXVII of 1850) read with article 227 of the Constitution filed by the respondent against the appellant in the High Court of Judicature at Patna and raises an important question as to whether the Commissioner appointed under Act XXXVII of 1850 is a Court. The respondent is a Member of the Bihar Civil Service (Executive Branch). The State Government received reports to the effect that the respondent bad been guilty of serious misconduct and corrupt practices in the discharge of his official duties while employed as Sub Divisional Officer at Aurangabad and they accordinly decided that an inquiry into the truth of. the various charges against him should be made under the provisions of the (Act XXXVII of 1850, hereinafter referred to as the Act) and Mr. Anjani Kumar Saran who was the then Additional District and Sessions Judge, Gaya, and was thereafter the District and Sessions Judge of that place was appointed Commissioner under the Act for making the inquiry. Gaya was fixed as the venue of the inquiry and the State Government also ordered that, during the pendency of the inquiry, the respondent will remain under suspension. The Government made the appointment aforesaid after obtaining the concurrence of the High Court on its administrative side which was obtained on the condition that an extra temporary post of Additional District and Sessions Judge was created by the Government for the period Mr. Saran was occupied with the inquiry. The appointment was made on the 2nd June 1952 and it was expected that Mr. Saran would be able to complete the inquiry during a period of three months. The respondent, however, adopted dilatory tactics. He made various representations to the Government, one on the 6th June 1952 demanding that a Judge of the High Court be appointed as Commissioner under the Act to make the inquiry against him and that inquiry be made at Patna and not at Gaya, another on the 10th July 1952 protesting against the appointment of Mr. Saran 957 as Commissioner to hold the inquiry against him and demanding that a ' confirmed District and Sessions Judge be appointed as Commissioner in his place, and ' a third on the 17th November 1952 in which he requested the Government to appoint three Commissioners instead of one for holding the inquiry against him and also to pay the entire cost of his defence at the same rates at which the Special Public Prosecutor engaged by the Government was being paid and also to reimburse other incidental expenses to be incurred by him. All these representations were turned down by the Government. Being thus thwarted in his attempts to put off the inquiry on some pretext or the other, the respondent tried to evade the same and failed and neglected to reply to the queries made from him by the Commissioner. The Commissioner also could not communicate to him the orders passed by him from time to time because the respondent did not stay at the headquarters and did not leave his proper address for communication either at Gaya or at Motihari. On the 24th November 1952 the Commissioner passed an order calling upon the parties to attend the hearing of the proceedings before him on the 8th December 1952 and forwarded a copy of this order to the appellant for communication to the respondent. The District Magistrates of Champaran and Gaya who were requested to serve a true copy of the order upon the respondent could not do so as he was available neither at Motihari nor at Gaya and it was with great difficulty that he could be traced at Patna and the order served upon him. On the 18th December 1952, the Commissioner passed another order recording that he was feeling great difficulty in contacting the respondent and in communicating his orders to him. He observed that this was a highly undesirable state of affairs and that it was necessary that his orders should be communicated to the res pondent as early as possible. A copy of this order was forwarded by the Commissioner to the appellant along with his letter dated the 20th December 1952 for information and doing the needful. The appellant thereafter wrote the letter complained against to 958 the Commissioner on the 26th December 1952 being D.O. No. II/3C 306/52A 11614 which ran as under: "Dear Mr. Saran, I am desired to refer to your memo No. 8266 dated the 26th November 1952 and to say that Government are anxious not to allow Mr. Jyoti Narayan to adopt dilatory tactics and delay the progress of the inquiry against him. I am to request you to be vigilant against such tactics adopted by Mr. Narayan. Yours sincerely, (Sd.) B. N. Sinha". The Commissioner acknowledged receipt of this letter by his D.O. letter No. 244, dated the 5th January 1953 stating that he would not allow the respondent to adopt any dilatory tactics and delay the progress of the inquiry against him. On the 2nd February 1953, the respondent filed a petition before the Commissioner stating inter alia that he had not been able to engage any lawyer or counsel for want of necessary papers and copies and prayed for an adjournment of the inquiry. He also prayed for starting a contempt of Court proceeding against the appellant but the Commissioner rejected both his prayers. The order which was passed by the Commissioner on these applications may as well be set out in extenso inasmuch as it has a bearing on the question whether the appellant was guilty of contempt of Court for having addressed the letter complained against to him: "3 2 53. Another point raised in the first petition of the accused was that Mr. B.N. Sinha, Deputy Secretary to Government in addressing his D.O. letter No. 11614, dated the 26th of December, 1952, was guilty of contempt, because he had interfered in my judicial discretion. I do not find anything in this letter from which it can be inferred that the author of the letter intended to influence me in the exercise of my judicial function. This letter was sent to me in reply to my memo No. 8266 dated 26 11 1952 whereby I had forwarded a copy of my order dated 24 11 1952 for communication to Mr. Narayan. Mr. 959 B.N. Sinha wrote in his letter dated the 26th of December 1952 that Government are anxious not to allow Mr. Jyoti Narayan to adopt dilatory tactics and to delay the progress of the inquiry. Now it is to be noted that Mr. Narayan in paragraph 11 of his petition has himself charged the State Government for delaying the inquiry and thereby causing harassment to him. Therefore, it is obvious that both parties, that is, the State and the accused are anxious that the inquiry should be expedited so what Mr. B.N. Sinha meant by writing the D.O. was that the inquiry should be expedited. This cannot by any stretch of imagination be construed to mean that the aforesaid officer in any way tried to influence me in the discharge of my judicial functions. For these reasons I rejected the two prayers contained in the first petition of Mr. J. Narayan". The respondent thereafter started proceedings in, contempt against the appellant in the High Court of Judicature at Patna. A Rule was issued by the High Court against the appellant which was heard and finally disposed of on the 12th June 1954. The High Court was of the opinion that the Commissioner appointed under Act XXXVII of 1850 was a Court, that the Court was subordinate to the High Court, that the letter complained against amounted to a contempt of Court and that the appellant was guilty of such contempt. It accordingly sentenced the appellant to pay a fine of Rs. 250 and in default to undergo simple imprisonment for a period of one month. The appellant obtained a Certificate under Article 134(1), (e) of the Constitution from the High Court. The Certificate was, however, limited to the question as to whether the Commissioner appointed under the Act is a Court. At the hearing before us, the appellant filed a petition for urging additional grounds which included inter alia the ground that the High Court erred in holding that the Commissioner appointed under the Act is a Court subordinate to the High Court within the meaning of the for the mere reason that its orders are open to be reviewed 960 judicially in exercise of the power vested in the High Court under article 227 of the Constitution and also the ground that the High Court erred in holding that the letter complained against tended to interfere with or obstruct the course of justice and constituted contempt of Court. The learned Attorney General for the appellant contended in the first instance that the Commissioner appointed under the Act is not a Court. He next contended that even if he is a Court, he is not a Court subordinate to the High Court within the meaning of the . He lastly contended that the letter complained against did not tend to interfere with or obstruct the course of justice and did not constitute contempt of Court. Prior to the enactment of the , there was in existence in India the Contempt of Courts Act, 1926 (XII of 1926). The various States also had their corresponding enactments. The Contempt of Courts Act, 1926 (XII of 1926) and the corresponding enactments in the States of Hyderabad, Madhya Bharat, Mysore, Pepsu, Rajasthan and Travancore Cochin and the Saurashtra Ordinance II of 1948 were repealed by the and a uniform Act to define and limit the powers of certain Courts in punishing contempts of Courts was enacted which extended to the whole of India except the State of Jammu and Kashmir. In section 2 of the Act, "High Court" was defined as meaning the High Court for a Part A State or a Part B State and including the Court of the Judicial Commissioner in a Part C State. Section 3 of the Act enacted: "3. (1) Subject to the provisions of sub section (2) every High Court shall have and exercise the same jurisdiction, powers and authority, in accordance with the same procedure and practice, in respect of contempts of Courts subordinate to it as it has and exercises in respect of contempts of itself. (2) No High Court shall take cognisance of a contempt alleged to have been committed in respect of a Court subordinate to it where such contempt is an 961 offence punishable under the Indian Penal Code (Act XLV of 1860)". The word "Court" was not defined in the Act and ' the expression "Courts subordinate to the High Courts" would prima facie mean the Courts of law subordinate to the High Courts in the hierarchy of Courts established for the purpose of administration of justice throughout the Union. It would be relevant, however, to notice the definitions of "Court" available elsewhere. Coke on Littleton and Stroud defined the word "Court" as the place where justice is judicially administered. According to Stephen, "In every Court, there must be at least three constituent parts the actor, reus and judex; the actor or plaintiff, who complains of an injury done; the reus, or defendant, who is called upon to make satisfaction for it; and the judex, or judicial power, which is to examine the truth of the fact, and to determine the law arising upon that fact, and if any injury appears to have been done, to ascertain, and by its officers to apply, the remedy". Section 3 of the Indian Evidence Act (I of 1872) defines "Court" as including all Judges and Magistrates, and all persons, except arbitrators. legally authorised to take evidence. This definition, however, has been held to be not exhaustive but framed only for the purpose of Indian Evidence Act and is not to be extended where such an extension is not warranted. Sections 19 and 20 of the Indian Penal Code (Act XLV of 1860) define the words "Court" and the "Court of Justice" as under: "Section 19. The word 'Judge ' denotes not only every person who is officially designated. as a Judge, but also every person who is empowered by law to give, in any legal proceeding, civil or criminal, a definitive judgment, or a judgment which, if not appealed against would be definitive, or a judgment which, if confirmed by some other authority would be definitive, or who is one of a body of persons, which body of persons is empowered by law to give such a judgment. 962 Section 20. The words "Court of Justice" denote a Judge who is empowered by law to act judicially alone, or a body of Judges which is empowered by law to act judicially as a body, when such Judge or body of Judges is acting judicially". The pronouncement of a definitive judgment is thus considered the essential sine qua non of a Court and unless and until a binding and authoritative judgment can be pronounced by a person or body of persons it cannot be predicated that he or they constitute a Court. The Privy Council in the case of Shell Co. of Australia vs Fedral Commissioner of Taxation(1) thus defined "Judicial Power" at page 295: "Is this right? What is "judicial power"? Their Lordships are of opinion that one of the best definitions is that given by Griffith, C. J. in Huddart, Parker & Co. vs Moorehead(2) where he says: "I am of opinion that the words judicial power ' as used in section 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action". Their Lordships further enumerated at page 297 certain negative propositions in relation to this subject: "1. A tribunal is not necessarily a Court in this strict sense because it gives a final decision; 2. Nor because it hears witnesses on oath; 3. Nor because two or more contending parties appear before it between whom it has to decide; 4. Nor because it gives decisions which affect the rights of subjects; 5. Nor because there is an appeal to a Court; 6. Nor because it is a body to which a matter is referred by another body. See Rex vs Electricity Commissioners(3)" (1) (2) ; , 357. (3) 963 and observed at page 298: "An administrative tribunal may act judicially, but still remain an administrative tribunal as distinguished from a Court, strictly so called. Mere externals do not make a direction to an administrative officer by an ad hoc tribunal an exercise by a Court of Judicial power". The same principle was reiterated by this Court in Bharat Bank Limited vs Employees of Bharat Bank Ltd.(1) and Maqbool Hussain vs The State of Bombay(1) where the test of a judicial tribunal as laid down in a passage from Cooper vs Wilson(1) was adopted by this Court: "A true judicial decision presupposes an existing dispute between two or more parties, and then involves four requisites: (I) The presentation (not necessarily orally) of their case by the parties to the dispute; (2) if the dispute between them is a question of fact, the ascertainment of the fact by means of evidence adduced by the parties to the dispute and, often with the assistance of argument by or on behalf of the parties on the evidence; (3) if the dispute between them is a question of law, the submission of legal arguments by the parties; and (4) a decision which disposes of the whole matter by a finding upon the facts in dispute and an application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law". Maqbool Hussain 's case, above referred to, was followed by this Court in section A. Venkataraman vs The Union of India and, Another(4) where a Constitution Bench of this Court also laid down that both finality and authoritativeness were the essential tests of a judicial pronouncement. It is clear, therefore, that in order to constitute a Court in the strict sense of the term, an essential condition is that the Court should have, apart from having some of the trappings of a judicial tribunal, power to give a decision or a definitive judgment which has finality and authoritativeness which are (1) ; (2) (1953] S.C.R. 730. (3) , 340. (4) ; 122 964 the essential tests of a judicial pronouncement. It was, however, urged by Shri Purshottam Tircamdas for the respondent that the word "Court" should not be limited to a Court of Justice or a Court of law but should be construed in a wide sense, including within the connotation, other Courts which, though not Courts of Justice, were nevertheless Courts according to law and be relied upon a decision of the Court of Appeal in England in Royal Aquarium and Summer and Winter Garden Society Ltd. vs Parkinson(1) and the observations of Fry, L.J. at page 446 therein: "I do not desire to attempt any definition of a "court". It is obvious that, according to our law, a court may perform various functions. Parliament is a court. Its duties as a whole are deliberative and legislative: the duties of a part of it only are judicial. It is nevertheless a court. There are many other courts which, though not Courts of Justice, are nevertheless courts according to our law. There are, for instance, courts of investigation, like the coroner 's court. In my judgment, therefore, the existence of the immunity claimed does not depend upon the question whether the subject matter of consideration is a Court of Justice, but whether it is a Court in law. Wherever you find a Court in law, to that the law attaches certain privileges, among which is the immunity in question". The question involved in that case was whether the defendant was entitled to absolute immunity from action for anything done by him while performing his duty as a member of the County Council in dealing with the applications for licences for music and dancing. It was contended on behalf of the defendant that he was exercising a judicial function when he spoke the words complained of and therefore was entitled to absolute immunity in respect of anything he said. The argument that "wherever you find a Court in law, to that the law attaches certain privileges among which is the immunity in question" was used on behalf of the defendant and Fry, L. J. dealt with the same as under at page 447: 965 "It was said that the existence of this immunity is based on considerations of public policy, and that, as a matter of public policy, wherever a body has to decide questions, and in so doing has to act judicially, it must be held that there is a judicial proceeding to which this immunity ought to attach. It seems to me that the sense in which the word "judicial" is used in that argument is this: it is used as meaning that the proceedings are such as ought to be conducted with the fairness and impartiality which characterize proceedings in Courts of Justice, and are proper to the functions of a judge, not that the members of the supposed body are members of a Court. Consider to what lengths the doctrine would extend, if this immunity were applied to every body which is bound to decide judicially in the sense of deciding fairly and impartially. It would apply to assessment committees, boards of guardians, to the Inns of Court when considering the conduct of one of their members, to the General Medical Council when considering questions affecting the position of a medical man, and to all arbitrators. Is it necessary, on grounds of public policy, that the doctrine of immunity should be carried as far as this? I say not. I say that there is ample protection afforded in such cases by the ordinary law of privilege. I find no necessity or propriety in carrying the doctrine so far as this argument requires". Lord Esher, M. R. expressed himself as follows while dealing with this argument at page 442: "It is true that, in respect of statements made in the course of proceedings before a Court of Justice, whether by judge, or counsel, or witnesses, there is an absolute immunity from liability to an action. The ground of that rule is public policy. It is applicable to all kinds of Courts of Justice; but the doctrine has been carried further; and it seems that this immunity applies wherever there is an authorized inquiry which, though not before a Court of Justice, is before a tribunal which has similar attributes. In the case of Dawkins vs Lord Rokeby(1) the doctrine was extended (1) L.R. 8 Q.B. 255; , 966 to a military court of inquiry. It was so extended on the ground that the case was one of an authorized inquiry before a tribunal acting judicially, that is to say, in a manner as nearly as possible similar to that in which a Court of Justice acts in respect of an inquiry before it. This doctrine has never been extended further than to Courts of Justice and tribunals acting in a manner similar to that in which such Courts act. Then can it be said that a meeting of the county council, when engaged in considering applications for licences for music and dancing, is such a tribunal? It is difficult to say who are to be considered as judges acting judicially in such a case". The case of Dawkins vs Lord Rokeby(1) was a case where immunity was claimed by a witness who had given evidence before a military Court of inquiry. The case went to the House of Lords and the Lord Chancellor, in his speech at page 754, in observed: "Now, my Lords, adopting the expressions of the learned Judges with regard to what I take to be the settled law as to the protection of witnesses in judicial proceedings, I certainly am of opinion that upon all principles, and certainly upon all considerations of convenience and of public policy, the same protection which is extended to a witness in a judicial proceeding who has been examined on oath ought to be extended, and must be extended, to a military man who is called before a Court of Inquiry of this kind for the purpose of testifying there upon a matter of military discipline connected with the army". Both these cases, the one before the Court of Appeal and the other before the House of Lords, were concerned with the extension of the principle of immunity of members of a tribunal or witnesses in judicial proceedings and the Courts logically extended the principle of immunity beyond the Courts of Justice to tribunals or bodies of persons functioning in a manner and according to procedure which was assimilated to a judicial inquiry. The extension of the (1) L.R. 8 Q.B. 255; 967 immunity to such tribunals or bodies would not, however, constitute them Courts of Justice or Courts of law. The position is thus summarised in the following passage in Halsbury 's Laws of England, Hailsham Edition, Volume 8, page 526: "Many bodies are not courts, although they have to decide questions, and in so doing have to act judicially, in the sense that the proceedings must be conducted with fairness and impartiality, such as assessment committees, guardians committees,, the Court of referees constituted under the Unemployment Insurance Acts to decide claims made on the insurance funds, the benchers of the Inns of Court when con sidering the conduct of one of their members, the General Medical Council, when considering questions affecting the position of a medical man". We must, therefore, fall back upon the tests laid down above for determining what is a Court strictly so called within the connotation of the term as used in the . It would be appropriate at this stage to note the relevant provisions of the (XXXVII of 1850) which would fall to be considered for determining whether the Commissioner appointed under the Act is a Court or not. The Act was passed for regulating inquiries into the behaviour of public servants and the preamble runs: "Whereas it is expedient to amend the law for regulating inquiries into the behaviour of public servants not removable from their appointments without the sanction of Government, and to make the same uniform throughout India; It is enacted as follows: " Section 2 requires the articles of charges to be drawn out and a formal and public inquiry to be ordered whenever the Government shall be of opinion that there are good grounds for making a formal and public inquiry into the truth of any imputation of misbehaviour by any such person. The inquiry may be committed under section 3 either to the Court, 968 Board or other authorities to which the person accused is subordinate or to any other person or persons specially appointed by the Government, Commissioners for the purpose. Sections 4 to 7 contain provisions in regard to the conduct of the prosecution and section 8 prescribes the powers of the Commissioners. This section has been particularly relied upon as constituting the Commissioners a Court, and runs as under: "Section 8. The commissioners shall have the same power of punishing contempts and obstructions to their proceedings, as is given to Civil and Criminal Courts by the Code of Criminal Procedure, 1898, and shall have the same powers for the summons of witnesses, and for compelling the production of documents, and for the discharge of their duty under the commission, and shall be entitled to the same protection as the Zila and City Judges, except that all process to cause the attendance of witnesses or other compulsory process, shall be served through and executed by the Zila or City Judge in whose jurisdiction the witness or other person resides, on whom the process is to be served, and if he resides within Calcutta, Madras or Bombay, then through the Supreme Court of Judicature thereto. When the commission has been issued to a Court, or other person or persons having power to issue such process in the exercise of their ordinary authority, they may also use all such power for the purposes of the commission". Section 9 prescribes a penalty for disobedience to process issued as aforesaid for the purpose of the commission and sections 10 to 20 prescribe the procedure to be followed in the conduct of the inquiry. It ,may be noted that this procedure is assimilated as far as possible to the conduct of a prosecution in a Criminal Court of law and the person accused is given the fullest opportunity to enter upon his defence and lead evidence in order to clear himself of the charges levelled against him. Sections 21 and 22 lay down the functions of the Commissioners in regard to the report to be made by them to the Government of their proceedings under the commission and the powers of 969 the Government to pass final orders on such reports. These sections have an important bearing on the question before us and they enact: "Section 21. After the close of the inquiry the commissioners shall forthwith report to Government their proceedings under the commission, and shall send with the record thereof their opinion upon each of the articles of charge separately, with such observations as they think fit on the whole case. Section 22. The Government, on consideration of the report of the commissioners, may order them to take further evidence, or give further explanation of their opinions. It many also order additional articles of charge to be framed, in which case the inquiry into the truth of such additional articles shall be made in the same manner as is herein directed with respect to the original charges. When special commissioners have been appointed, the Government may also, if it thinks fit, refer the report of the commissioners to the Court or other authority to which the person accused is subordinate, for their opinion on the case; and will finally pass such orders thereon as appear just and consistent with its powers in such cases". These provisions were considered by this Court in the case of S.A. Venkataraman vs The Union of India and Another(1). The question that arose for consideration there, was whether an inquiry made and concluded under the Act amounted to prosecution and punishment for an offence as contemplated under article 20(2) of the Constitution. Articles of charge bad been framed against the petitioner in that case and evidence had been led both by the prosecutor and by the defence and witnesses on both sides were examined on oath and cross examined and re examined in the usual manner. The Commissioner bad found, on a consideration of the evidence, that some of the charges had been proved against the petitioner and had submitted a report to that effect to the Government. The President had accepted the opinion of the Commissioner and, in view of the findings on (1) ; 970 the several charges arrived at by the latter, was pro visionally of the opinion that the petitioner should be dismissed. Opportunity was given to the petitioner under Article 311(2) of the Constitution to show cause against the action proposed to be taken in regard to him and after considering his representation and after consultation with the Union Public Service Commission, the President finally decided to impose the penalty of dismissal upon him and he was accordingly dismissed. After his dismissal, the police submitted a charge sheet against him before the Special Judge, Sessions Court, Delhi, charging him with offences under sections 161 and 165 of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act and upon that summons were issued by the learned Judge directing the petitioner to appear before his Court. The petitioner thereupon challenged the legality of this proceeding in a writ petition contending, that the proceedings were without jurisdiction inasmuch as they amounted to a fresh prosecu tion, for offences for which he had been prosecuted and punished already. While considering whether under the circumstances there had been a violation of the fundamental right of the petitioner under Article 20(2) of the Constitution, this Court, scrutinised the provisions of the Act and the position of the Commissioner appointed, thereunder. Justice Mukherjea, as he then was, delivered the judgment of the Court and observed at page 1159: "As the law stands at present, the only purpose, for which an enquiry under Act XXXVII ' of 1850 could be made, is to help the Government to come to a definite conclusion regarding the misbehaviour of a public servant and thus enable it to determine provisionally the punishment which should be imposed upon him, prior to giving him a reasonable opportunity of showing cause, as is required under article 311(2) of the Constitution. An enquiry under this Act is not at all compulsory and it is quite open to the Government to adopt any other method if it so chooses. It is a matter of convenience merely and 971 nothing else. It is against this background that we will have to examine the material provisions of the of 1850 and see whether from the nature and result of the enquiry which the Act contemplates it is at all possible to say that the proceedings taken or concluded under the Act amount to prosecution and punishment for a criminal offence."; and at page 1160: "A Commissioner appointed under this Act has no duty to investigate any offence which is punishable under the Indian Penal Code or the Prevention of Corruption Act and he has absolutely no jurisdiction to do so. The subject matter of investigation by him is the truth or otherwise of the imputation of misbehaviour made against a public servant and it is only as instances of misbehaviour that the several articles of charge are investigated, upon which disciplinary action might be taken by the Government if it so chooses. The mere fact that the word "prosecution" has been used, would not make the proceeding before the Commissioner one for prosecution of an offence. As the Commissioner has to form his opinion upon legal evidence, be has been given the power to summon witnesses, administer oath to them and also to compel production of relevant documents. These may be some of the trappings of a judicial tribunal, but they cannot make the proceeding anything more than a mere fact finding enquiry. This is conclusively established by the provisions of sections 21 and 22 of the Act. At the close of the enquiry, the Commissioner has to submit a report to the Government regarding his finding on each one of the charges made. This is a mere expression of opinion and it lacks both finality and authoritativeness which are the essential tests of a judicial pronouncement. The opinion is not even binding on the Government. Under section 22 of the Act, the Government can, after receipt of the report, call upon the Commissioner to take further evidence or give further explanation of his opinion. When Special Commissioners are appointed, their report could be referred to the court or other authority 123 972 to which the officer concerned is subordinate for further advice and after taking the opinion of the different authorities and persons, the Government has to decide finally what action it should take". The Court was no doubt concerned in that case with finding whether the inquiry before the Commissioner was tantamount to a prosecution of the petitioner. While considering the same, however, the position of the Commissioner was discussed and the conclusion to which the Court came was that he was a mere fact finding authority, that the report made by the Commissioner to the Government was merely his expression of opinion and it lacked both finality and auth oritativeness which are the essential tests of a judicial pronouncement. This conclusion is sufficient to establish that the Commissioner appointed under the Act was not a Court and his report or findings were not a definitive judgment or a judicial pronouncement inasmuch as they were not binding and authoritative and lacked finality. We are also of the same opinion. Apart from the above considerations which weighed with the Court in that case, we have also the provisions of section 8 of the Act itself which go to show that the Commissioners are given certain powers 'of the Civil and Military Courts in regard to punishing contempts and obstruction to their proceedings, summoning of witnesses, compelling the production of documents and for service of their process as also the same protection as Zila and City Judges. The very fact that this provision had got to be enacted shows that the position of the Commissioners was not assimilated to that of Judges and that they did not constitute Courts of Justice or Courts of law but were mere fact finding tribunals deriving whatever powers they could exercise under the very terms of the Act which created them. The power of punishing contempts and obstruction to their, proceedings as is given to Civil and Criminal Courts by the Code of Criminal Procedure, 1898 was also similar in its nature and the very nature and extent of the power indicated that they were not Courts in the ordinary sense of the term. No such provision would have been 973 uted Courts of Justice or Courts of law and it is no argument to say that these provisions were enacted even though they were not strictly necessary merely for the sake of abundant caution or clarification of the position. We are of the opinion that the Commissioner appointed under the Act, having regard to the circumstances above set out, does not constitute a Court within the meaning of the term as used in the . Our attention was, however, drawn by, Shri Purshottam Tricamdas to a decision of a Division Bench of the Punjab High Court in Kapur Singh vs Jagat Narain(1). That was a case directly in point and on all fours with the case before us. The learned Chief Justice of the Punjab High Court bad been appointed a Commissioner under the Act in the matter of an inquiry against Sardar Kapur Singh, I.C.S., and Lala Jagat Narain, the editor, printer and publisher of ail Urdu Daily newspaper published at Jullundur called The Hindu Samachar, was called upon to show cause why he should not be punished under section 3 of with regard to a leading article which appeared in his name in the issue of the paper dated the 12th March 1951. A preliminary objection was taken on his behalf that the Court had no jurisdiction to take proceedings against him for contempt and the argument was that the Court of the Commissioner appointed to hold an inquiry under the Act was not a Court and in any event was not a Court subordinate to the High Court. Mr. Justice Falshaw who delivered the judgment of the Court observed at page 50 in connection with this argument: "The itself seems clearly to indicate that a Commissioner or Commissioners appointed under the Act constitute a Court as they are given all the powers of a Court regarding the summoning of witnesses and other matters, and the only ground on which the learned counsel for the respondent could base his argument that the Commissioner does not constitute a Court was that he can (1) A.I.R. 1951 Punjab 49. 974 give no final decision, but merely has to draw up a report giving his findings on the charge or charges against the respondent, which is to be forwarded to the Government. In my opinion, however, this fact alone is not sufficient to make the Commissioner or Commissioners any thing other than a Court and it is to be noted that the definition of Court in section 3, Evidence Act, is very wide indeed as it reads: " 'Court ' includes all Judges and Magistrate and all persons, except arbitrators, legally authorised to take evidence". The learned Judges there relied upon the definition of Court given in section 3 of the Indian Evidence Act which, as has already been noted, is framed only for the purposes of the Act and is not to be extended where such an extension is not warranted. This definition does not help in the determination of the question whether the Commissioners appointed under the Act constitute a Court and the attention of the learned Judges was not drawn to the position that finality and authoritativeness are the essential tests of a judicial pronouncement. We are of the opinion that the decision reached by the learned Judges of the Punjab High Court in that case was wrong and cannot help the respondent. Our attention was also drawn to another decision of the Nagpur High Court in M. V. Rajwade vs Dr. section M. Hassan(1). The question which came to be considered by the Court in that case was whether a commission appointed under the was a, Court within the meaning of section 3 of the , and, while considering the provisions of that Act, the learned Judges of the Nagpur High Court incidentally considered the provisions of the . They rightly observed that "the term 'Court ' has not been defined in the . The Act, however, does contemplate a 'Court of Justice ' which as defined in section 20, Indian Penal Code, 1860, denotes 'a judge who is empowered by law to act judicially '. The least that is required of a Court is the capacity to deliver a "definitive judg (1) A.I.R. 1954 Nag. 975 ment" and unless this power vests in a tribunal in any particular case, the mere fact that the procedure adopted by it is of a legal character and it has the power to administer an oath will not impart to it the status of a Court", and came to the conclusion that the commission appointed under the is not a Court within the meaning of the Contempt of 'Courts Act, 1952. The learned Judges were merely considering the provisions of the and were not concerned with the construction of the provisions of the and whatever observations they made in regard to the provisions of the latter Act by way of comparing the same with the provisions of the former which they were there considering would not have the effect of putting on the provisions of the latter Act a construction which would be any avail to the respondent before us. The ratio which was adopted by the learned Judges was quite correct but it appears that they digressed into a consideration of the provisions of the in order to emphasize the character and position of the commission appointed under the even though it was not strictly necessary for the purpose of arriving at their decision, though it must be mentioned that while discussing the nature and function of the commission they expressed themselves correctly as under: "The Commission governed by the is appointed by the State Government "for the information of its own mind", in order that it should not act, in exercise of its executive power, "otherwise than in accordance with the dictates of justice & equity" in ordering a departmental enquiry against its officers. It is, therefore, a fact finding body meant only to instruct the mind of the Government without producing any document of a judicial nature". We are of the opinion that neither of these cases which have been relied upon by Shri Purshottam Tricamdas is of any help to the respondent or detracts 976 from the true position as we have laid down above. The only conclusion to which we can come on a consideration of all the relevant provisions of the Act is that the Commissioner appointed under the Act is not a Court within the meaning of the . In view of the conclusion reached above, we do not think it necessary to go into the question whether the Commissioner appointed under the Act is a Court subordinate to the High Court within the meaning of the . Nor do we think it necessary to express any opinion as to whether the letter complained against constituted a contempt of Court. We may, however, note in passing that the circum stances under which the letter came to be addressed by the appellant to the Commissioner, the terms thereof and the order which was passed by the Commissioner on the application made by the respondent to proceed against the appellant in contempt on date the 2nd February 1953 lend support to the argument which was advanced on behalf of the appellant that the letter complained against did not constitute contempt of Court. The result, therefore, is that the appeal will be allowed, the order passed against the appellant by the Court below will be set aside and the original Criminal Miscellaneous Petition No. 10 of 1953 filed by the respondent in the High Court of Judicature at Patna will stand dismissed. The fine if paid will be refunded.

Held, that a Commissioner appointed under the (XXVII of 1850) is not a court within the meaning of the (XXXII of 1952). Shell Co. of Australia vs Federal Commissioner of Taxation ([1931] A.C. 275), Huddart,Parker & Co. vs Moorehead ([1909] ; , Rex vs Electricity Commissioners ([1924] 1 K.B. 171), Bharat Bank Limited vs Employees of Bharat Bank Ltd. ([1950] S.C.R. 459), Maqbool Hussain vs The State of Bombay ([1953] S.C.R. 730), Cooper vs Wilson ([1937] 2 K.B. 309), section A, Venkataraman vs The Union of India and Another ([1954] S.C.R. 1150), Royal Aquarium and Summer and Winter Garden Society Ltd. vs Parkinson ([1892] 1 Q.B. 431), Dawkins vs Lord Rokeby ([1873] L.R. 8 Q.B. 265), Kapur Singh vs Jagat Narain (A.I.R. 1951 Punjab 49) and M. V. Bajwade vs Dr. section M. Hassan, (A.I.R. , referred to.

Appeal No. 13 of 1966. Appeal from the judgment and order dated January 13, 1964 of the Punjab High Court, Circuit Bench at Delhi in Civil Writ No. 557 D of 1961. M.P. Vashi, Dalip K. Kapur,, S.V. Tambwekar and A. G. Ramaparkhi, ,for the appellant. D. Narsaraju, R.M. Mehta and S.P. Nayar, for the respondents. The Judgment of the Court was delivered by Hegde, J. In this appeal by certificate though. several contentions were raised in the memo of appeal only two of them were pressed at the time of hearing. They are: (1) under the circumstances of the case the confiscation ordered by the Collector, Central Excise is illegal and (2) under any circumstance he could not have confiscated the entire quantity of tobacco used in the mixture. The appellants are tobacco merchants in Dashrath village near Baroda in Gujarat State. At the relevant time they were holding Central Excise licence in form L 2 and L 5 for the purpose of storing, selling and processing duty paid and non duty paid tobacco. They had their own duty paid and non duty paid godowns. In about December 1958 according to their books they possessed the following lots of different varieties of tobacco. variety of tobacco Quantity Rate of duty Veriety of tobacco Quantity Rate of duty Bmds. Rs. Biri Patti " 251.8 1.20 np per Ib Stems Kandi " 287.20 0.50 Do. Rava " 1326.14 0.50 Do. Stalk Kandi " 57.20 0.06 Do. 582 On December 13, 1958 the appellants obtained permission from the Local Central Excise authorities to mix the above lots of tobacco. The percentage of different varieties of tobacco when mixed would have been as under: Rava 68.97 % Stems Kandi 14.86 % Biri Patti 13.07 % Stalk Kandi 3.00% On December 23, 1958 when the process of mixing was still going on the Superintendent of Central Excise, Preventive Headquarters, Baroda and his party raided the duty paid premises of the appellants. There he seized the entire mixture tobacco weighing Mds. 2004.3 srs. i.e. 1,64,834.50 lbs. of tobacco. According to that Superintendent when experiments were conducted he found in the above mixture percentage of different varieties as under: Rava 44 % Biri Patti 51.50 % Stems Kandi 3 .74 % From this he concluded that 'considerable quantity of non duty paid Biri Patti tobacco had been utilised in the manufacture of the mixture. Hence notice was issued to the appellants on January 6, 1959 to show cause why action should not be taken against them under rule 40 of the Central Excise Rules 1944 inasmuch as they brought into duty paid premises 60,770 lbs. of Biri Patti tobacco without payment of duty. It was also alleged in that notice that the appellants had removed certain quantity of Rava tobacco from L 2 premises. The appellants submitted their reply on March 13, 1959. At the hearing before the Collector as the appellants challenged the correctness of the experiments conducted by the Superintendent, Central Excise, the Collector himself in the presence of the appellants conducted a fresh experiment. On the basis of that experiment he came to the conclusion that the results obtained by the experiment conducted by the Superintendent, Central Excise are by and large correct. By his order dated April 13, 1959, the Collector, Central Excise held the appellants guilty of contravening rule 40 and consequently levied on them a penalty of Rs. 2,000 as well as the duty payable under law. He also ordered the confiscation of the seized tobacco weighing 1,64,834.50 lbs. But he gave an option to the appellants of redeeming the same on payment. of a fine of Rs. 1 lac. The appellants paid the amount of fine. under protest and got the goods released. Thereafter they moved the High Court of Bombay under article 226 of the Constitution for quashing the order of the Collector but that application was withdrawn as the appellants first 583 wanted to exhaust their remedy under the Central Excise Act. The appellants unsuccessfully went up in appeal and thereafter in revision under the Central Excise and Salt Act, 1944 against the order of the Collector. After the 3rd respondent dismissed their revision petition they filed in the High Court of Punjab at Delhi Civil Writ No. 557 D of 1961 challenging the legality of the order made by the Collector of Central Excise on April 13, 1959. That petition was dismissed by a Division Bench of that Court on January 13, 1964. This appeal is brought against that decision. in this Court the finding of the Collector of Central Excise that the appellants were guilty of mixing the duty paid tobacco with non duty paid tobacco and thereby they contravened rule 40 was not challenged. Nor was there any dispute about the quantity of non duty paid tobacco used in the mixture. The main contention of Mr. M.P. Vaish, learned Counsel for the appellants was that under rule 40, the Collector could not have confiscated the tobacco mixture as it consisted of both duty paid tobacco as well as tobacco on which duty had not been paid. His alternative contention was that under any circumstance the Collector could not have confiscated anything more than 60,770 ' lbs. of the mixture which can be said to represent Biri Patti tobacco on which duty had not been paid. In support of his first contention he heavily relied on the decision of K.T. Desai, J. in Messrs. Valitmahomed Gulamhusain Sonavala & Co. vs C.T. A. Pillai (1). The seized tobacco mixture weighed 1,64,834.50 lbs. That included 60,770 lbs. of Biri Patti tobacco on which duty had not been paid. But on the remaining quantity duty had been paid. The tobacco seized was found in the godown licenced to store duty paid tobacco. Hence the appellants were clearly guilty of contravening rule 40 of the Central Excise Rules which reads: "Except as provided in the proviso to sub rule (1) of rule 32 and in rule 171 no wholesale purchaser of unmanufactured tobacco for the purpose of trade or manufacture and no wholesale purchaser of other unmanufactured products from a curer shall receive into any part of his premises or into his custody or possession, any unmanufactured tobacco or other unmanufactured products, other than tobacco or other unmanufactured products imported from a foreign country otherwise than under a valid permit granted by an officer showing that the proper duty has been paid; and every such wholesale purchaser who receives or has in his custody or possession any such goods, in contravention of this rule shall, in respect of every such offence, be liable to pay the duty leviable on such (1) (1960) 42 B.L.R., p. 634. 584 goods, and to a penalty which may extend to two thousand rupees, and the goods shall also be liable to confiscation." .lm0 In view of this rule the legality of the order made by the Collector in so far as he levied duty as well as penalty cannot be challenged and was not challenged before us. But so far as the confiscation is concerned ' it was urged that under the rule in question only tobacco on which duty had not been paid could alone have been confiscated. In the instant case even according ,to the finding of the Collector only on 66,770 lbs. of Biri Patti tobacco the duty had not been paid; but on the remaining tobacco seized duty had been paid, it was not possible to separate the duty paid tobacco from the non duty paid tobacco; hence it was impermissible for the Collector to confiscate the said tobacco under Rule 40 as that rule permitted the confiscation of only non duty paid tobacco. In Sonavala 's case(1) referred to earlier Desai, J. had held that the right to confiscate smuggled goods under section 167(8) of the does not carry with it the right to confiscate unsmuggled goods. The words "such goods ' appearing in section 167(8) of the Act cannot be interpreted .to mean similar goods. It is not open to the Customs authorities to confiscate similar goods even though they may be of the same quality, bulk and value. The words 'such goods ' mean the very goods which have been smuggled. If the smuggled goods lose their identity, it would not be open to the Customs officers to confiscate any part of those goodS. Where, therefore, gold that has been smuggled has in the melting process got so mixed up with gold that is unsmuggled that it is impossible to separate the smuggled gold from the unsmuggled one, the right to confiscate smuggled gold ceases when the two get inextricably mixed up. The broad proposition laid down by Desai, J. undoubtedly supports the contention advanced on behalf of the appellants. We shall presently show that this statement of the law is not correct but it is necessary to mention at this juncture that in the Sonavala 's case(1) an innocent third party had purchased the smuggled gold for proper value and mixed the same with unsmuggled gold, which circumstance had an important bearing on the decision of the case. In Institutes of Justinian at page 104 dealing with the topic commixtio it is observed: "If the things mixed, still remaining the property of their former owners, were easy to separate again, as for instance, cattle united in one herd, when one owner brought his claim by vindicatio 'his property was restored to him without difficulty but if there was difficulty in separating the materials from each other, as in dividing the grains of wheat in a heap, the obvious (1960) 42 B.L.R.p. 585 mode would be to distribute the whole heap in shares proportionate to the quantity of wheat belonging to the respective owners. But it might happen that the wheat mixed together was not all of the same quality, and therefore the owner of the better kind of wheat would lose by having a share determined in amount only by the quantity of his wheat; and the judge therefore was permitted to exercise his judgment how great an addition ought to be made to his share to compensate for the superior quality of the wheat originally belonging to him. " In Williams on Personal Property (18th Edn.) at p. 50, it is observed: "The acquisition of ownership by accession or confusion of substances also presupposes a previous title. Thus the young of a domestic animal belong to the owner of the mother. If any substances, for instance tallow, belonging to. various owners be mixed by consent or accidentally, the mass appears to belong to the owners of its parts in common. And if the confusion be made wilfully by one without the other 's leave, the mass belongs to the latter, whose ownership is thus unlawfully invaded." Dealing with the same topic it is observed in Halsbury 's Laws of England 3rd Edn. (Vol. 29) at p. 378. "Ownership of goods may be acquired by confusion or intermixture, if the goods, when mixed, are indistinguishable. If the goods are mixed by agreement or consent the proprietors have an interest in common in proportion to their respective shares; if mixed by accident or the act of a third party, or which neither owner is responsible, the proprietors become owners in common of the mixed property in proportion to the amounts contributed. Where, however, one man wilfully mixes his goods with those of another without the approbation or knowledge of the other, the whole be longs to the latter. " The law on this topic was stated by Bovill, C.J. as early as 1868 ' in Spence and Anr. vs The Union Marine Insurance Co. Ltd.(1) thus: "In our own law there are not many authorities to be found upon this subject but, as far as they go, they are in favour of the view, that, when goods of diffe (1) Law Reports (Common Pleas) 3, 1867 68. 586 rent owners become by accident so mixed together as to be undistinguishable, the owners of the goods so mixed become tenants in common of the whole, in the proportions which they have severally contributed to it. The passage cited from the judgment of Blackburn, J., in the case of the tallow which was melted and flowed into the sewers, is to that effect: Buckley vs Gross. And a similar view was adopted by Lord Abinger in the case of the mixture of oil by leakage on board ship in Jones vs Moore. ' "It has been long settled in our law, that where goods are mixed so as to become undistinguishable, by the wrongful act or default of one owner, he cannot recover, and will not be entitled to his proportion, or any part of the property, from the other owner, but no authority has been cited to shew that any such principle has ever been applied, nor indeed could it be applied, to the case of an accidental mixing of the goods of the two owners; and there is no authority nor sound reason for saying that the goods of several persons be the property of their several owners, and become bona vacantia. " The same principle was again reiterated by the House of Lords in Smurthwaite and Ors. vs Hannay and Ors.(1) The rules enunciated above are of assistance in finding out a solution to the problem before us though they do not govern the same. In the instant case there is no doubt that the appellants were guilty of an unlawful act in mixing duty paid tobacco with the non duty paid tobacco but the fact remains that they were the owners of both those lots at the time they mixed them and hence the legal principles set out earlier do not cover such a case. It must also be remembered that in dealing with a provision relating to forfeiture we are dealing with a penal provision. It would not be proper for us to extent the scope of that provision by reading into it words which are not there and thereby widen the scope of the provision relating to confiscation. Rule 40 permits the Central Excise authorities to confiscate only those goods on which duty has not been paid. It does not permit them either specifically or by necessary implication to confiscate other goods. Therefore it was not permissible for the Collector to confiscate the entire tobacco mixture. At the same time no person can be permitted to benefit by his wrongful act. No rule of law should be so interpreted as to permit or encourage its circumvention. If by the wrongful act of a party he renders it impossible for the authorities to confiscate under rule 40 the non (1) [1894] A.C.p. 587 duty paid goods it is in our opinion open to those authorities to confiscate from out of the goods seized, goods of the value reasonably representing the value of the non duty paid goods mixed in the goods seized. Applying that rule to the facts of this it follows that the Collector, Central Excise could have confiscated out of the tobacco seized,. much of it as can be held to reasonably represent the value of the tobacco on which the duty had not been paid. As noticed earlier the tobacco confiscated had been returned to the appellants after realising from them a sum of Rs 1 lac as fine. The Counsel for the parties agreed at the hearing that the ' value of the Biri Patti tobacco used in the mixture for which no duty had been paid could be fixed at Rs. 35,000. In view of this agreement it is not necessary for us to remit the case back to the Collector of Central Excise for assessing the value of the tobacco on which duty had not been paid. In view of our earlier findings the fine to be levied on the appellants in lieu of the confiscation that could have been ordered has to be fixed at Rs. 35,000. From this it follows that the Collector has to refund to the appellants a sum of Rs. 65,000 which he has collected from them in excess of the aforementioned Rs. 35,000. The appeal is allowed to that extent. In the circumstances of the case we direct the parties to bear their own costs both in this Court as well as before the High Court. R.K.P.S. Appeal allowed in part.

The appellants were tobacco merchants in Baroda in Gujarat State and were holding Central Excise licence in Forms L 2 and L 5 for the purpose of storing, selling and processing duty paid and non duty paid tobacco. On December 23, 1958 while the process of mixing some tobacco was going on in a godown where duty paid tobacco was. kept, the Superintendent of Central Excise., Preventive Headquarters, Baroda and his party raided the premises of the appellants and seized a mixture of tobacco weighing 1,64,834.50 lbs. tobacco This mixture included 60,770 lbs. of tobacco on which duty had not been paid. After the 'appellants were issued a show cause notice why action should not be taken against them under rule 40 of the Central Excise Rules, 1944, and after they had filed their reply, the Collector, Central Excise, by his order dated April 13, 1959 held the appellants guilty of contravening rule 40 levied on them a penalty of Rs. 2,000 as well as the duty payable under the law, and also ordered the confiscation of the entire quantity of the tobacco seized. As he gave the appellants the option of redeeming the same on payment of a fine of Rs. 1 lakh, they paid the fine under protest and secured release of the tobacco. The appellant 's appeal as well as revision against the Collector 's order under the provisions of the Central Excise and Salt Act, 1944, were both dismissed. The appellants then filed a writ petition under article 226 of the Constitution challenging the legality of the Collector 's order but this was dismissed by the High Court. In appeal to this Court the only challenge was to the Collector 's order of confiscation. It was contended, relying on the decision in Messrs. Valimahomed Gulamhusain Sonavala & Co. vs C.T.A. Pillai, (1960) 42, B.L.R., p. 634, that the Collector could not have confiscated the tobacco mixture as it consisted of both duty paid tobacco as well as tobacco on which duty had not been paid, the alternative contention was that the Collector could not in any extent have. confiscated more than 60,770 lbs. of mixture which could be said to represent tobacco on which duty had not been paid. HELD: Rule 40 permits the Central Excise. authorities to confiscate only those goods on which duty had not been paid. It does not permit them either specifically or by necessary implication to confiscate other goods. Therefore it was not permissible for the Collector to confiscate the entire tobacco mixture. At the same time no person can be permitted to benefit by his wrongful act. No rule of law should be so interpreted as to permit or encourage its circumvention. If by the wrongful act of a party he renders it impossible for the authorities to confiscate under 581 rule 40 the non duty paid goods, it is open to those authorities to confiscate from out of the goods seized, goods of the 'value reasonably representing the value of the non duty paid goods mixed in the goods seized. Applying that rule to the facts of the present case it follows that although the appellants were guilty under Rule 40 of an unlawful act in mixing duty paid tobacco with non duty paid tobacco, the Collector could have confiscated out of the tobacco seized so much of it as can be held to reasonably represent the value of the tobacco on which the duty had not been paid. [586 G 581 B] As the parties were agreed that the value of the tobacco used in the mixture for which no duty had been paid could be fixed at Rs. 35,000,. the fine to be levied on the appellant in lieu of the confiscation that could have been ordered had to. be fixed at Rs. 35,000. The Collector therefore had to refund to the appellant a sum of Rs. 65,000. Institutes of Justinian, p. 104; Williams on Personal Property (18th edition) p. 50; Spence and Ant. vs The Union Marine Insurance Co. Ltd., Law Reports (Common Pleas) 3, 1867 68 and Smurthwaite and Ors. vs Hannay and Ors. , [1894] A.C.p. 494; referred to.

iminal Appeal No. 74 of 1961. Appeal by special leave from the judgment and order dated May 7, 1957, of the Allahabad High Court in Criminal Misc. No. 2006 of 1953. Veda Vyas, section K. Kapur and Ganpat Rai, for the appellant. G.C. Mathur and C. P. Lal, for the respondent. April 27. The Judgment of Gajendragadkar, Sarkar, Wanchoo and Ayyangar, JJ., was delivered by Sarkar, J. Das Gupta, J., delivered a separate Judgment. SARKAR, J. The only question that was argued in this appeal is substantially one of construction of section 99D of the Code of Criminal Procedure. The appellant was the author of two books in Hindi called Sikh Mat Khandan Part 1 and Bhoomika Nazam Sikh Mat Khandan which he had published in April 1953. On July 30, 1953, the Government of Uttar Pradesh, the respondent in this appeal, made an order under section 99A of that Code forfeiting these books which were thereupon seized and taken away. That order, so far as material, was in the following terms: "In exercise of its powers conferred by section 99A of the Code of Criminal Procedure. . the 489 Government is pleased to declare the books forfeited to Government on the ground that the said books contain matter, the publication of which is punishable under section 153 A and 295 A of the Indian Penal Code. " It is the validity of this order that is challenged in the present appeal. Section 99A under which the order was made, so far as relevant, is in these terms: "Where any newspaper, or book or any document appears to the State Government to contain any seditious matter or any matter which promotes or is intended to promote feelings of enmity or hatred between different classes of the citizens of India or which is deliberately and maliciously intended to outrage the religious feelings of any such class by insulting the religion or the religious belief of that class, that is to say, any matter the publication of which is punishable under section 124A or section 153A or section 295A of the Indian Penal Code, the State Government may, by notification in the Official Gazette stating the grounds of its opinion, declare every copy of such book to be forfeited to Government Two things appear clearly from the terms of this section. The first thing is that an order under it can be made only when the Government forms a certain opinion. That opinion is that the document concerning which the order is proposed to be made, contains "any matter the publication of which is punishable under section 124A or section 153A or section 295A of the Penal Code. " Section 124A deals with seditious matters, section 153A with matters prompting enmity between different classes of Indian citizens and section 295A with matters insulting the religion or religious beliefs of any class of such citizens. The other thing that appears from the section is that the Government has to state the grounds of its opinion. The order made in this case, no doubt, stated that in the Government 's opinion the books contained matters the publication of which was punishable under sections 153A and 295A of the Penal Code. It did not, however, state, as it should have, the grounds of that opinion. So it is 490 not known which communities were alienated from each other or whose religious beliefs had been wounded according to the Government, nor why the Government thought that such alienation or offence to religion had been caused. Now section 99B gives the person interested in the books, or documents forfeited, a right to apply to the High Court to set aside the order made under section 99A, and section 99D specifies the High Court 's duty on such an application being made to it. These two sections will have to be especially considered in this case and so they along with section 99C, are set out below. section 99B. Any person having any interest in any newspaper, book or other document, in respect of which an order of forfeiture has been made under section 99A, may, within two months from the date of such order, apply to the High Court to set aside such order on the ground that the issue of the newspaper, or the book or other document, in respect of which the order was made, did not contain any seditious or other matter of such a nature as is referred to in sub section (1) of section 99A. section 99C. Every such application shall be heard and determined by a Special Bench of the High Court composed of three Judges. section 99D. (1) On receipt of the application, the Special Bench shall, if it is not satisfied that the issue of the newspaper, or the book or other document, in respect of which the application has been made, contained seditious or other matter of such a nature as is referred to in sub section (1) of section 99A, set aside the order of forfeiture. We think it fairly clear from these sections that the ground on which an application can be made under section 99B is the ground which, if established, would require the High Court to set aside the order under section 99D. The appellant bad moved the High Court. at Allahabad under section 99B to set aside the order of forfeiture of his books. It seems to have been contended in the High Court that the order of forfeiture should be set aside on the ground that the grounds of the 491 Government 's opinion had not been stated. With regard to this contention, the High Court observed, "The requirement to state the ground is mandatory. A mere citation of words of the section will not do. But as has been held by a Special Bench of this Court in Baijnath vs Emperor (A.I.R. 1925 All. 195), with which we respectfully agree, the High Court in view of the provisions of section 99D of the Code of Criminal 'Procedure is precluded from considering any other point than the question whether in fact the document comes within the mischief of the offence charged. " In this view of the matter the High Court refused to set aside the order on account of the omission to state the grounds of the opinion. The High Court then proceeded to examine the books for itself and found that their contents were "obnoxious and highly objectionable" and dismissed the application observing that the appellant had "entirely failed to show that the books did not contain matters which promoted feelings of enmity and hatred between different classes, or which did not (sic) insult or attempt to insult the religion or religious beliefs of the Sikhs". The present appeal arises out of this order of the High Court. The High Court was of the view that its duty under section 99D was only to see "whether in fact the document comes within the mischief of the offence charged". It thought that a document would be within the mischief of the offence charged if, in its own opinion, it contained matters the publication of which would be punishable under either section 124A, or section 153A or section 295A of the Penal Code as mentioned in the order of forfeiture, irrespective of the Government 's opinion on the matter. Otherwise, it seems to us, the High Court could not uphold the order for the reason that in its view the books offended the Sikhs and the Sikh religion in spite of the fact that there is nothing to show that the Government thought that the books had that effect. The same view appears to have been taken in certain other cases, namely, Premi Khem Raj vs Chief Secretary (1), N. Veerabrahmam vs State of Andhra Pradesh (2) and Baba Khalil Ahmed vs State of U.P. (3). (1) A.I.R. (1951) Raj. (2) A.I.R (1959) A.P. 572. (3) A.I.R. (1960) All. 715. 492 Apparently, it was thought in these cases that the words "if it is not satisfied that. . the book. . contained seditious or other matter of such a nature as is referred to in sub section (1) of section 99A" in section 99D meant, not so satisfied for any reason whatsoever irrespective of the reasons on which the Government formed its opinion about it. We are unable to accept this construction of section 99D. The question is what do the words "matter of such a nature as is referred to in sub section (1) of section 99A" appearing in section 99D mean? Do they mean any matter of that nature as the High Court thought? Or do they mean only those on which the order of forfeiture was based, that is, those which for the reasons stated by it, the Government thought were punishable under one or more of sections 124A, 153A and 295A of the Penal Code mentioned by it?. It seems to us that the latter is the correct view and follows inevitably if sections 99A, 99B and 99D are read together, as they must. Now section 99D is concerned with setting aside an order. That order is one made under section 99A. An order under that section can be made only when certain things have appeared to the Government and the Government has formed a certain opinion. The section further requires the Government to state the grounds of its opinion. It is this order, that is, the order based on the grounds stated, which the party affected has been given by section 99B the, right to move the High Court to set aside. It would follow that all that section 99B can require the party. to do is to show that order was improper. Whether that order was proper or not would, of course, depend onlyon the merits of the grounds on which it was based; whether another order to the same effect could have been made on other grounds is irrelevant, for that would not show the validity of the order actually made; that order would be bad if the grounds on which it is made do not support it. Two orders, though both saying that a pub lication contains matter which offends the same section of the Penal Code cannot be the same or an identical order if the reasons why they are considered so to 493 offend the section of the Penal Code concerned are different. Now section 99B says that a person affected by the order may move the High Court to set it aside on the ground that the book "did not contain any seditious or other matter of such a nature as is referred to in sub section (1) of section 99A". The matter men tioned here must, for the reasons stated, refer only to such matter on which for the grounds stated by it, the Government 's opinion has been based. We proceed now to a. 99D. It is concerned with the same order of forfeiture. An order contemplated by section 99D is made on an application under section 99B. That order must therefore accept or reject the grounds on which the application under section 99B was made. These grounds, as we have seen, are confined to challenging the propriety of the grounds on which the Government 's opinion resulting in the order, was based. The words which we have earlier quoted from section 99B occur substantially in the same form in section 99D. The scope of the two sections is identical. The common words occurring in them must, therefore, have the same meaning in both. They must hence, in section 99D also mean such matters on which for the grounds stated by it the Government 's opinion was based. They cannot mean, as the High Court thought, any matter whatsoever, irrespective of the Government 's reasons for making the order, which in the High Court 's opinion would have justified it. This view of the matter also explains why section 99A requires the Government to state the grounds of its opinion. The reason was to enable the High Court to set aside the order of forfeiture if it was not satisfied of the propriety of those grounds. If it were not so, the grounds of the Government 's opinion would serve no purpose at all. This would specially be so as section 99G provides that an order of forfeiture cannot be called in question except in accordance with the provisions of section 99B. If the order could be upheld, as the High Court seems to have thought, on grounds other than those on which the Government based its opinion, there would have been no need to provide 63 494 that the grounds of the Government 's opinion should be stated; such grounds would then have been wholly irrelevant in judging the validity of the order. The acceptance of the interpretation put by the High Court would lead to a result which, in our view, would be wholly anomalous. The order of forfeiture with which section 99D is concerned is indisputably an order under section 99A. Now, an order under that section is essentially an order of the Government and of no one else. Take a case where the Government making the order states the grounds of its opinion on which the order is based. Suppose the Government says that the expression of view A in the book concerned offends the religious beliefs of community X. Now assume that in an application made to set it aside, the High Court was not satisfied that view A could offend community X but thought that another expression of view in the same book which we will call B, offended the religious beliefs of a different community, say community Y. If in such a case the High Court upheld the order, which, if the view of the Court below is right, it could do, there would really be an order of forfeiture made by the High Court and not by the Government, because the Government in stating the grounds of its opinion had not, since it did not say so, thought that view B could offend the religious beliefs of community Y. We think it impossible that the sections concerned contemplated such a result; the Code nowhere provides for an order of forfeiture being made by the High Court. We are, therefore, of opinion that under section 99D it is the duty of the High Court to set aside an order of forfeiture if it is not satisfied that the grounds on which the Government formed its opinion that the books contained matters the publication of which would be punishable under any one or more of sections 124A, 153A or 295A of the Penal Code could justify that opinion. It is not its duty to do more and to find for itself whether the book contained any such matter whatsoever. What then is to happen when the Government did not state the grounds of its opinion? In such a case 495 if the High Court upheld the order, it may be that it would have done so for reasons which the Government did not have in contemplation at all. If the High Court did that, it would really have made an order of forfeiture itself and not upheld such an order made by the Government. This, as already stated, the High Court has no power to do under section 99D. It seems clear to us, therefore, that in such a case the High Court must set aside the order under section 99D, for it cannot then be satisfied that the grounds given by the Government justified the order. You cannot be satisfied about a thing which you do not know. This is the view that was taken in Arun Ranjan Ghose vs State of West Bengal (1) and we are in complete agreement with it. The present is a case of this kind. We think that it was the duty of the High Court under section 99D to set aside the order of forfeiture made in this case. We accordingly allow the appeal and set aside the Government 's order of forfeiture dated July 30, 1953. The appellant will be entitled to a return of all books, documents and things seized under that order. DAS GUPTA, J. By a notification dated July 30, 1953 the Uttar Pradesh Government acting under section 99A of the Code of Criminal Procedure declared the books "Sikh Mat Khandan, Part 1" and "Bhoomika Nazam Sikh Mat Khandan" which had been published by the appellant Harnam Das in April 1953, forfeited to government on the ground that these books contained matters the publication of which was punishable under section 153A and 295A of the Indian Penal Code. The High Court held on an examination of the books that they clearly came within the mischief of section 153A and section 295A of the Indian Penal Code. Accordingly it held that the order of the State Government forfeiting the two books was eminently just and proper and in that view dismissed the application. One argument appears to have been raised that the order of forfeiture should be set aside as the notification by which the government made the declaration (1) 496 of forfeiture did not state the grounds of the government 's opinion as required by section 99A. The High Court rejected this argument being of opinion that in view of the provisions of section 99D of the Code of Criminal Procedure the High Court was "precluded from consideration of any other point than the question whether in fact the document comes within the mischief of the offence charged. " It is quite clear that the government notification did not state the grounds of the opinion formed by the government that these documents contained matters the publication of which was punishable under section 153A and section 295A of the Indian Penal Code. The question raised before us is whether the High Court was right in rejecting the argument that the order of forfeiture should be set aside on the ground that grounds of the government 's opinion were not stated in the government notification as required by section 99A. The view which prevailed with the learned judges in respect of this question was in accord with what had been held by the same High Court in an earlier case of Baijnath vs Emperor (1) and by the Rajasthan High Court in Premi Khem Raj vs Chief Secretary (2). The same view has later on been taken by the Andhra Pradesh High Court in N. Veerabrahmam vs State Of Andhra Pradesh (3) and by the Allahabad High Court in a later decision in Baba Khalil Ahmad vs State of U. P. (4). A contrary view appears to have been taken by the Calcutta High Court in Arun Ranjan Ghose vs The State of West Bengal (5). The material portion of section 99A is in these words: "Where any newspaper, or book. or any document. appears to the Government to contain any seditious matter or any matter which promotes or is intended to promote feelings of enmity or hatred between different classes of the citizens of India or which is deliberately and maliciously intended to outrage the religious feelings of any such class by insulting the religion or the religious belief of that (1) A.I.R. (1925) All. 195. (2) A.I.R. (1951) Raj. (3) A.I.R. (1950) An. (4) A.I.R. (1960) All, 715. (5) 497 class, that is to say, any matter the publication of which is punishable under section 124A or section 153A or section 295A of the Indian Penal Code, the State Government may, by notification in the Official Gazette stating the grounds of its opinion, declare . every copy of such book. to be forfeited to the government. " It is clear therefore that before any government makes a declaration forfeiting a book under the provisions of this section it has first to be of opinion that the book does contain a matter the publication of which is punishable under section 124A or section 153A or section 295A of the Indian Penal Code. Once it forms such an opinion the government has the power to declare the book forfeited. The section requires that this must be done by a notification in the official gazette and in that notification the government is required to state the grounds on which it formed the opinion. The legislature however did not make such an order made by the government immune from any attack. In section 99B it has provided the means by which the aggrieved person may obtain relief against the order if in fact the government was wrong in its opinion and the book did not contain a matter the publication of which is punishable under section 124A, or section 153A or section 295A of the Indian Penal Code. Section 99B runs thus: "Any person having any interest in any news paper, book or other document, in respect of which an order of forfeiture has been made under section 99A, may, within two months from the date of such order, apply to the High Court to set aside such order on the ground that the issue of the newspaper, or the book or other document, in respect of which the order 'wa s made, did not contain any seditious or other matter of such a nature as is referred to in sub section (1) of section 99A." Section 99D provides that if after hearing the application the High Court is not satisfied that the issue of the document in question contains any seditious matter or any other matter referred to in section 99A, that is to say, any matter the publication of which is 498 punishable under section 124A or section 153A or section 295A of the Indian Penal Code the High Court shall set aside the order of forfeiture. The necessary result of the provision also is that if the High Court is satisfied that the book in question contains matter the publication of which is punishable under section 124A or section 153A or section 295A of the Indian Penal Code, the High Court will refuse to set aside the order of forfeiture. It has to be noticed that section 99B in providing for relief to a person aggrieved by an order of forfeiture has limited the grounds on which relief can be applied for to one and one only, viz., that the issue of the newspaper, or the book or other document, in respect of which the order was made, does not contain any seditious matter or other matter of such a nature as is referred to in sub section (1) of section 99A. The appellant 's contention that the High Court should also examine the notification to find out whether the government had stated the grounds of its own opinion as required by section 99A and set aside the order of forfeiture if it finds that this requirement has note been fulfilled seeks to add an additional ground on which an application can be made under section 99B and relief can be given by the High Court under section 99D. The question is: Can that be done? It is well to recognise that just as a right of appeal is a creature of statute the right to apply for setting aside an order which is really in the nature of an appeal is equally a creature of statute and when the legislature creates such a right by a statute it may at its option make the right unlimited or may limit it in any manner it likes. It is settled law that no Court can add to or enlarge the grounds for appeal as laid down in the statute creating the appeal. The position is exactly the same when the statute creates a right to seek relief by way of application and no court can add to the grounds on which relief can be sought if the statute creating the right to obtain relief is limited to one or more specified grounds. It is interesting to remember in this connection the right to apply for review granted by O. 47 r. 1 of the Code of Civil Procedure. After specifying 499 some grounds on which a review can be applied for, the legislature added a further ground in the words "for any other sufficient reason". The proper interpretation of these words "for any other sufficient reason" has engaged the anxious consideration of the courts and in 1922 the Privy Council after a review of the numerous cases laid down, the rule that "for any other sufficient reason" means a reason sufficient on grounds at least analogous to those specified immediately previously. If the correct position had been that the court might add to the ground for a review whenever it thought fit, all the discussion as regards the interpretation of "for any other sufficient reason" would have been meaningless and unnecessary. Indeed the position in law that the courts cannot add to the grounds to which the legislature has limited the right of relief is so very clear and unassailable that the learned counsel for the appellant did not like to suggest that a ground can be added. To overcome this difficulty that the courts cannot add to the grounds of relief specified in section 99B and section 99D, an ingenious argument has been put forward that in order that the High Court can give proper relief on the very ground mentioned in section 99B and section 99D it is essential that the government 's order should state the grounds of its opinion. The steps of the argument may shortly be stated thus: The government has formed an opinion. The High Court has to see that opinion is correct. In order to do this the High Court must know what weighed with the government in coming to its opinion. Therefore, without the grounds of the Government 's opinion the High Court cannot be satisfied within the meaning of section 99D that the issue of the newspaper contained the matter complained of. The fallacy of this syllogistic process is in the un soundness of the premises that in order to determine whether the government 's opinion is correct or not the High Court must know what weighed with the government. When the application is heard by the High Court and it has to come to a conclusion whether it is or it is not satisfied that the issue of the newspaper, 500 or the book or other document does contain a matter mentioned in section 99A, the one and only way of coming to a conclusion appears to me to be to read the newspaper, or the book or other document. Arguments of counsel might be of assistance; if the government has stated its grounds for coming to its opinion, that would also help; but the ultimate responsibility of deciding whether or not to be satisfied that the issue of newspaper contains matters as mentioned in section 99A can only be discharged by the High Court by reading the document in question. It has been suggested that when section 99B and section 99D uses the words "any seditious or other matter of such a nature as is referred to in sub section (1) of section 99A", they mean only those matters on which the Government based the order of forfeiture; so it is urged, unless the Government stated the ground of its opinion, it will be impossible for the Court to decide the question under section 99D. I confess I do not think it reasonably possible to conceive of a case, where an order under section 99A will not mention the particular matter referred to in section 99A. (1) The mention of the particular matter out of the several matters referred to in section 99A which in its opinion is contained in the document does not however involve the statement of reasons for forming the opinion. Suppose a Government states that in its opinion the document contains seditious matters. It does not cease to be a complete statement on this point merely because the reason for forming the opinion are not also stated. The formation of the opinion that one or more of the matter,% referred to in the section are contained in a document and the statement that such an opinion has been formed are quite distinct from the statement of the reasons for forming the opinion. It appears to me clear that where, as in the present case the Government order contains a statement of the particular matter or matters out of the several matters, referred to in section 99A, viz., any seditious matter or any matter which promotes or is intended to promote feelings of enmity or hatred between different classes of the citizens of India or 501 which is deliberately and maliciously intended to outrage the religious feelings of any such class by insulting the religion or the religious beliefs of that class, that is to say, any matter the publication of which is punishable under section 124A or section 153A or section 295A of the Indian Penal Code" which in its opinion the document contains, no difficulty can possibly arise from the fact that the Court has not got before it Government 's grounds for forming such opinion. But, asks the appellant, why was it necessary then for the legislature to require in section 99A that the Government should state the grounds of its opinion when notifying the order of forfeiture? The real reason, it is urged, was to enable the High Court to set aside the order of forfeiture if it was not satisfied of the propriety of those grounds, and necessarily also when no grounds were stated. If that were correct, it was reasonable to expect the legislature to make the necessary provision in a. 99B that an order could be challenged on the ground that the grounds of the opinion were not stated, and consequential provisions in section 99D. I can see no justification for reading into these sections section 99A and section 99D words which are not there, in an attempt to understand why section 99A contains such a requirement for statement of grounds of the opinion. There can be no doubt that this is a very salutary provision that Government should record the grounds of its opinion. Such a provision diminishes the risk of government making an arbitrary order of forfeiture. It was therefore a question of legislative policy for the legislature to require that the government should state its opinion. To say that there could have been no reason for including such a requirement in section 99A unless the legislature intended the High Court to interfere if grounds of the opinion were not stated, is, in my opinion, wholly unjustified. It seems clear to me that the duty cast by section 99D on the judges of the High Court is not to see whether in a particular case the grounds stated by 64 502 the government for forming its opinion are correct, but to see whether the opinion formed was correct. To perform this duty the one and the only way is to examine the document which in the Government 's opinion contains the matter complained of. The argument that the High Court is not in a position to perform this duty under section 99D satisfactorily in the absence of a statement by the government of the grounds of its opinion appears to me therefore wholly unsound. In this very case, the learned judges of the High Court of Allahabad felt no difficulty in coming to a conclusion on the question before them even though the government had not stated the grounds of its opinion. I fail to see any justification for imagining difficulties where there are none. I have therefore come to the conclusion that the High Court was right in rejecting the argument that the order of forfeiture should be set aside on the ground that the notification did not state government 's grounds for forming the opinion. The appeal should therefore be dismissed. By COURT In view of the opinion of the majority, this appeal will be allowed and the order of the High Court, set aside. The appellant will be entitled to the return of all the books, documents and other things seized from him under the order now set aside. He will also be entitled to the refund of expenses and costs that he had to pay under the order of the High Court.

The respondent passed an order under section 99A of the Code of Criminal Procedure forfeiting two books written by the appellant as in its opinion they contained matter the publication of which was punishable under section 153A and 295A of the Indian Penal Code. The order did not state the grounds on which the respondent had formed this opinion as was required by section 99A. The appellant applied to the High Court under section 99B of the Code to set aside the order. Section 99D of the Code provided that the High Court shall set aside the order of forfeiture if it was not satisfied that the book contained seditious or other matter of such a nature as was referred to in sub section (1) of section 99A. The High Court was of the view that it could not set aside the order under section 99D for the reason that the order did not set out the grounds on which the Government had formed its opinion and that its duty was only to see whether the books in fact came within the mischief of the offence charged. Upon examining the books for itself the High Court came to the conclusion that their contents were obnoxious and highly objectionable and dismissed the application. Held (Per Gajendragadkar, Sarkar, Wanchoo and Ayyangar, jj. Das Gupta, J. contra) that on the failure of the respondent to set out the grounds of its opinion as required by section 99A of the Code the High Court should have set aside the order under section 99D. It is the duty of the High Court under that section to set aside the order of forfeiture if it is not satisfied that the grounds on which the Government formed its opinion could justify that opinion. Where no grounds of its opinion are given at all the High Court must set aside the order for it cannot then be satisfied that the grounds given by the Government justified the order. Arun Ranjan Ghose vs State of West Benaal, (1955) 59 C.W.N. 495, approved. Premi Khem Rai vs Chief Secretary, A.I.R. (1951) Raj. II3, N. Veerabrahmam vs State of Andhra Pradesh, A.I.R. (1959) A. Pr. 572 and Baba Khalil Ahmed vs State of U. P., A.I.R. (1960) All. 715, disapproved. 488 Per Das Gupta, J. The High Court had no power to set aside the order on the ground of failure of the Government to set out the grounds of its opinion in the order. The duty cast on the High Court is not to see whether the grounds stated by the Government for forming its opinion are correct but to see whether the opinion formed is correct; this can only be done by examining the books. Section 99B has limited the grounds on which relief can be asked for to one and one only, viz., that the books do not contain any objectionable matter. It was not permissible for courts to add to that ground. Baijnath vs Emperor A.I.R. (1925) All. 195, Premi Khem Raj vs Chief Secretary, A.I.R. (1951) Raj. 113, N. Veerabrahmam vs State of Andhra Pradesh, A.I. R. 1959 A. Pr. 572 and Baba Khalil Ahmed vs State of U. P., A.I.R. (1960) All. 715, approved. Arun Ranjan Ghose vs The State of West Bengal, , disapproved.

Appeal No. 2065 of 1968. Appeal from the judgment and order dated September 18, 1968 of the Calcutta High Court in F.M.A. No. 381 of 1967. B. Sen, B. P. Maheshwari, A. N. Parikh and section M. Jain, for the appellant. D. Narsaraju, R. H. Dhebar and section P. Nayar, for respondents Nos. and 2. The Judgment of the Court was delivered by Hidayatullah, C.J. This is an appeal against the judgment of the High Court of Calcutta dismissing a writ petition filed by the appellant Debesh Chandra Das. This appeal is by certificate against the judgment dated September 18, 1968. The appellant is a member of the Indian Civil Service. He qualified in 1933 and arrived in India in 1934 and was allotted to Assam. In 1940 he came to the Government of India and became in turn Under Secretary and Deputy Secretary, Home Ministry. In 1947 he went back to Assam where he held the post of Development Commissioner and Chief Secretary. In 1951 he again came to the Government of India as Secretary, Public Service Commission. In 1955 he became Joint Secretary to the Government of India and continued to hold that post till 1961. From 1961 to 1964 he was Managing Director of Central Warehousing Corporation. On July 29, 1964, he was appointed Secretary, Department of Social Security with effect from July 30, 1964 and until further, orders, On March 6, 1965 the, 222 Appointments Committee of the Cabinet approved the proposal to continue him as Secretary, Department of Social Security. He continued in that Department, which is now renamed as the Department of Social Welfare. On June 20, 1966 he received a letter from the Cabinet Secretary which was to the following effect: "My dear Debesh: For sometime, the Government has been examin ing the question of building up a higher level of administrative efficiency. This is much more important in the context of the recent developments in the country. The future is also likely to be full of problems. In this connection, the Government examined the names of those who are at present occupying top level administrative posts with a view to ascertaining whether they were fully capable of meeting the new challenges or whether they should make room for younger people. As a result of this examination, it has been decided that you should be asked either to revert to your parent State or to proceed on leave preparatory to retirement or to accept some post lower than that of Secretary of Govt. I would be glad if you would please let me know immediately as to what you propose to do so that further action in the matter may be taken. Yours sincerely, Sd/ (DHARMA VIRA)". He asked for interview with the Cabinet Secretary and the Prime Minister and represented his case but nothing seems to have come of it. On September 7, 1966 he received a second letter from the Cabinet Secretary which said inter alia as follows : ". . I am now directed to inform you that after considering your oral and written representations in the matter Government has decided that your services may be placed at the disposal of your parent state, namely, Assam. In case, however, you like to proceed on leave preparatory to retirement, will you please let me know ?. " The appellant treated these orders as reduction in his rank ,and filed a writ petition in the High Court of Calcutta on September 19, 1966. According to him the order amounted to a reduction in rank since the pay of a Secretary to the Government of India (I.C.S.) is Rs. 4,000 and the highest pay in Assam (I.C.S.) 22 3 is Rs. 3,500. There being no equal post in the Government of Assam his reversion to the Assam Service meant a reduction not only in his emoluments but also in his rank. He also contended that he held a 5 years ' tenure post and the tenure was to end on July 29, 1969 but was wrongly terminated before the expiry of five years. He also alleged that there was a stigma attached to his reversion as was clear from the three alternatives which the letter of the Cabinet Secretary gave him. The highest post in the Government of Assam being equivalent to the Joint Secretary of Government of India, his reversion to the highest post, i.e. Chief Secretary to the Government of Assam, amounted to a reduction in rank. He contended, if this was the case, the procedure under article 311(2) of the Constitution ought to have been followed and without following that procedure the order was not sustainable. When the appellant filed the writ petition he was appointed as a Special Secretary on October 15, 1966 but under one of his juniors. It may be mentioned here that the appellant is next only to the Cabinet Secretary in the matter of seniority. He also received a letter from the Government of India dated October 20, 1966 in which it was said that Government was considering giving him a post equal to that of a Secretary. The writ petition was dismissed by Justice A. N. Ray on May 19, 1967. The following day the appellant was again riposted to Assam but he filed an appeal and obtained a stay. On March 21, 1968 he was appointed Secretary in the Department of Statistics in the Central Government. The appeal was heard by Justice P. B. Mukharji and Justice A. N. Sen who differed, the former was in favour of dismissing the appeal while the latter was in favour of allowing it. The appeal was then laid before Sankar Prosad Mitra, J. who agreed with Justice Mukherji and the appeal was dismissed on September 18, 1968. On September 20, 1968 the appellant was reposted to Assam. He, however, filed the present appeal and has proceeded on leave although no orders on leave application seemed to have been passed when we heard the appeal. In this appeal also, it is contended that the reversion of the appellant to the Assam Service amounts to a reduction in rank. This is on the ground that he held a higher post in the Government of India and there is no post equal to it under the Assam Government. The post of the Chief Secretary in the Assam Government is equal to the post of a Joint Secretary in the Government of India and his reversion would therefore indirectly mean a reduction in his rank and also in his emoluments because the highest post in Assam does not carry a salary equal to that of a Secretary in the Government of India. He also contends that under article 311(2) an enquiry had to be made and he had to be 224 given a chance of explaining his case in the reduction in rank amounted to a penalty. He contends that the letters of the Cabinet Secretary speak for themselves and clearly show that he was being offered a lower post even in the Government of India if he was to continue here denoting thereby a desire to reduce him in rank. The letters also speak of his unsatisfactory work and, therefore, cast a stigma on him and therefore his reversion must be treated as a penalty and if the procedure laid down under article 311(2) is not followed, the order of the Government of India could not be sustained. This, in short, is the case which he had put up before the High Court and has now put up before us. The Government of India contends that he was on deputation and the deputation could be terminated at any time; that his orders of appointment clearly show that the appointments were "until further orders" and that he had no right to continue in the Government of India if his services were not required and that his reversion to his parent State did not amount either to any reduction in rank or a penalty, and, therefore, the order was quite legal. Prior to 1946 the members of the Indian Civil Service were in a Civil Service of the Secretary of State. As a result of a conference between Chief Ministers and the Government of India an All India Administrative Service was constituted in October 1946. This agreement was entered into under section 263 of the Government of India Act, 1935. The Indian Administrative Service was common to the Centre and the Provinces. On January 25, 1950 rules were framed under sections 241(2) and 247 of the Government of India Act, 1935. These rules were known as the Indian Civil Administrative (Cadre) Rules, 1950. Under these rules cadres were constituted. A 'cadre ' is defined in Fundamental Rule 9(4) as the strength of a service or a part of a service sanctioned as a separate unit. In these rules 'cadre officer ' meant an officer belonging to any of these categories specified in rule 4 and 'cadre post ' meant any duty post included in the Schedule to the Rules. In rule 4, it was provided that every cadre post shall be filled inter alia by an officer who is a member of the Indian Civil Service. ' In the Schedule Assam was to have 20 senior posts under the Provincial Government, 6 senior posts under the Central Government and 37 posts for direct recruitment, and junior posts and certain services. After 1954 a number of Rules were framed and we are concerned in this case with the Indian Administrative Service (Cadre) Rules 1954, Indian Administrative Service (Fixation of Cadre Strength) Regulations 1955 and Indian Administrative Service (Pay) Rules 1954. Under the Pay Rules were shown the posts carrying pay above the time scale pay in the Administrative Service under the State Governments. In Assam there were 225 four such posts. Chief secretary (Rs. 3,000), Member, Board of Revenue, Commissioners and Development Commissioners (Rs. 2500 125/2 2750). These four were the Only posts above the time scale and the highest pay possible was that of a Chief Secretary carrying Rs. 3,000/ p.m. [vide All India Service Manual (1967) p. 2481. The lower posts in Assam were; Secretaries, Additional Secretaries, Joint Secretaries etc. who were on a time scale with ceiling of Rs. 2,250 p.m. (ibid p. 263) As against this the posts carrying pay above the time scale or special pay in addition to pay in the time scale under the Central Government when held by Indian Administrative Service men were Secretaries to the Government of India with a pay of Rs. 3,500/ (Rs. 4,000 for Indian Civil Service men) and so on in a downward position There was no separate cadre in the Government of India as defined in the Fundamental Rule mentioned above. There were only cadres in the States. Posts beyond the State cadre limit were only to be found in the Government of India. The Indian Administrative Service (Cadre) Rules 1954 provided as elaborate machinery for getting persons to fill the posts in the Government of India. ' Similarly, the Indian Administrative Service (Fixation of Cadre Strength) Regulations 1955 provided for these matters. Rule 3 of the Indian Administrative Service (Cadre) Rules provided as follows; "3. "Constitution of Cadres. (1) There shall be constituted for each State or group of States an Indian Administrative Service Cadre. (2) The cadre so constituted for a State or a group of States is hereinafter referred to as a 'State Cadre ' or, as the case may be, a 'Joint Cadre. Rule 4 next provided : "Strength of Cadres. (1) The strength and composition of each of the cadres constituted under rule 3 shall be as determined by regulations made by the Central Government in consultation with the State Governments in this behalf and until such regulations are made, shall be as in force immediately before the commencement of these rules. (2) The Central Government shall, at the interval of every three years, re examine the strength and composition of each such cadre in consultation with the State Government or the State Governments concerned and may make such alterations therein as it deems fit : Provided that nothing in this sub rule shall be deemed to affect the power of the Central Government to alter the strength and composition of any cadre at any other time; 226 Provided further that the State Government concerned may add for a period not exceeding one year and with the approval of the Central Government for a further period not exceeding two years, to a State or Joint Cadre one or more posts carrying duties or responsibilities of a like nature to cadre posts. " Rule 6 then provided for deputation of cadre officers. It reads as follows: "6. Deputation of cadre officers. (1) A cadre. officer may, with the concurrence of the State Government or the State Governments concerned and the Central Government, be deputed for service under the Central Government, or another State Government or under a company, association or body of individuals, whether incorporated or not, which is wholly or substantially owned or controlled by the Government. (2) A cadre officer may also be deputed for service under (i) a Municipal Corporation or a Local Body, by the State Government on whose cadre he is borne, or by the Central Government with the concurrence of the State Government on whose cadre he is borne, as the case may be and (ii) an international Organisation, an autonomous body not controlled by the Government, or a private body, by the Central Government in consultation with the State Government on whose cadre he is borne: Provided that no cadre officer shall be deputed to any Organisation or body of the type referred to in item (ii) of this sub rule except with his consent. " It may be pointed out here that 'permanent post ' is defined by the Fundamental Rules as a post carrying a definite rate of pay and sanctioned without limit of time and a 'temporary pose is defined as a post carrying definite rate of pay sanctioned for a limited time and a 'tenure post ' means a permanent post which an individual Government servant may not hold for more than a limited period. All cadre posts were to be filled by cadre officers (rule 8), but temporary appointments of non cadre officers to cadre posts were possible under certain circumstances (rule 9). Under the Indian Administrative Service (Fixation of Cadre Strength) Regulations 1955 Assam was to have a total of 117 cadre posts. Of these, 55 were under the Government of Assam 227 and 22 senior posts were to be under the Central Government. 19 were promotion posts and 58 were to be filled by direct recruitment. There were certain reserved posts for leave reserves, deputation reserves, training reserves and finally there were 'junior posts. By the agreement which formed an annexure to the Indian Civil Administrative (Cadre) Rules 1950, Assam was to have 20 senior posts under the Provincial Government and 6 senior posts under the Central Government with some provision for direct recruitment posts, junior posts and reserves. These posts denoted combined Service between the Central Government and the Assam Government. The arrangement allowed an officer to go from one post to another whether under the Centre or the State but not a lower post unless the exigency of the case so demanded. The posts in the Government of India were held in the ordinary course and were not deputation posts. They were not as a part of the deputation reserves. Under article 312, these services must be considered common to the Union and the State : tinder section 4 of the All India Services Act 1951 all rules in force immediately before the commencement of the Act and applicable to an All India Service were continued, thus the Indian Civil Administrative (Cadre) Rules 1950 continued to remain in force. The position that emerges is that the cadres for the Indian Administratively are to be found in the States only. There is no cadre in the Government of India. A few of these persons are, however,intended to serve at the Centre. When they do so they enjoy better emoluments and status. They rank higher in the service and even in the Warrant of Precedence of the President. In the States they cannot get the same salary in any post as Secretaries are entitled to in the Centre. The appointments to the Centre are not in any sense a deputation. They mean promotion to a higher post. The only safeguard is that many of the posts at the Centre are tenure posts. Those of Secretaries and equivalent posts are for five years and for lower posts the duration of tenure is four years. Now Das held one of the tenure posts. His tenure ordinarily was five years in the post. He got his secretaryship on July 30, 1964, and was expected to continue in that post for five years, that is, till 29th July, 1969. The short question in this case is whether his reversion to the Assam State before the expiry of the period of his tenure to a post carrying a smaller salary amounts to reduction in rank and involves a stigma upon him. Reversion to a lower post does not per se amount to a stigma. But we have here evidence that the reversion is accompanied by a stigma. In the first letter issued to him on June 20, 1969 by Mr. Dharma Vira (Cabinet Secretary) it was said 228 Government was considering whether the persons at top level administrative posts were capable of meeting the new challenges or must make room for younger men. The letter goes on to say that he may choose one of three alternatives : accept a lower post at the Centre, go back to a post carrying lower salary in Assam or take leave preparatory to retirement. The offer of a lower post in Delhi is a clear pointer to the fact of his demotion. It clearly tells him that his reversion is not due to any exigency of service but because he is found wanting. The three alternatives speak volumes. This was not a case of reverting him to Assam at the end of a deputation or tenure. He can be retained in the Central Services provided he accepts a lower post, and the final alternative that he may retire clearly shows that the Government is bent upon removing him from his present post. In the next letter this fact is recognised because on September 7, 1966 he is offered only two alternatives. The alternative of a lower post is advisedly dropped because it discloses too clearly a stigma. If any doubt remained it is cleared by the affidavit which is now filed. Paragraphs 7 and 10 of the affidavit read as follows: "7. With reference to the allegations made in paragraphs 13 to 23 of the said application, I make no admission in respect thereof except what appears from relevant records. I further say that the performance of the petitioner did not come to the standard expected of a Secretary to the Government. of India." "10. The allegations made in paragraph 26 of the said application are correct. I further say that the said representation was rejected by the Prime Minister in view of the standard of performance of the petitioner. " Now it has been ruled again and again in this Court that re duction in rank accompanied by a stigma must follow the procedure of article 311(2) of the Constitution. It is manifest that if this was a reduction in rank, it was accompanied by a stigma. We are satisfied that there was a stigma attaching to the reversion and that it was not a pure accident of service. It remains to see whether there was a reduction in rank. There is no definition of reduction in rank in the Constitution. But we get some assistance from rule 3 of the All India Services (Discipline and Appeal) Rules, which provides: "3 Penalties. The following penalties , may, for good and sufficient reasons, and as hereinafter provided, be imposed on a member of the Service, namely 229 (iii) reduction in rank including reduction to a lower post or time scale, or to a lower stage in a time scale. We have shown above that he was holding a tenure post. Nothing turns upon the words of the notification 'Until further orders ' because all appointments to tenure posts have the game kind of order. By an amendment of F.R. 9(30) in 1967, a form was prescribed and that form was used in his case. These notifications also do not indicate that this was a deputation which could be terminated at any time. The notifications involving deputation always clearly so state the fact. Many notifications were brought to our notice during the argument which bear out this fact and none to the contrary was shown. Das thus held a tenure post which was to, last till July 29, 1969. A few months alone remained and he was not so desperately required in Assam that he could not continue here for the full duration. The fact that it was found necessary to break into his tenure period close to its end must be read in conjunction with the three alternatives and they clearly demonstrate that the intention was to reduce him in rank by sheer pressure of denying him a secretaryship. No Secretary, we were told, has so far been sent back in this manner and this emphasises the element of penalty. His retention in Government of India on a lower post thus was a reduction in rank. Finally we have to consider whether his reversion to Assam means a reduction in rank. It has been noticed above that no State Service (the highest being Chief Secretary 's) carries the emoluments which Das was drawing as a Secretary for years. His reversion would have meant a big drop in his emoluments. Das was prepared to go to Assam provided he got a salary of Rs. 4,000 per month but it was stated before us that that was not possible. Das was prepared to serve the Centre in any capacity which brought him the same salary. This too was said to be not possible. This case was adjourned several times to enable Government to consider the proposal but ultimately it was turned down. All that was said was that he could only be kept in a lower post. If this is not reduction in rank we do not see what else it is. To give him a Hobson 's choice of choosing between reversion to a post carrying a lower salary or staying here on a lower salaried post, is to indirectly reduce him in rank. Therefore, we are satisfied that Das was being reduced in rank with a stigma upon his work without following the procedure laid down in article 311(2). We say nothing about a genuine case of accident of service in which a person drafted from a State has to go back for any reason not connected with his work or conduct. Cases must obviously arise when a person taken from 230 the State may have to go back for reason unconnected with his work or conduct. Those, cases are different and we are not expressing any opinion about them. But this case is clearly one of reduction in rank with a distinct stigma upon the man. This requires action in accordance with article 311(2) of the Constitution and since none was taken, the order of reversion cannot be sustained. We quash it and order the retention of Das in a post comparable to the post of a Secretary in emoluments till such time as his present tenure lasts or there is an inquiry against him as contemplated by the Constitution. Before we leave this case we are constrained to say that the attitude in respect of this case was not very happy. Das offered to take leave preparatory to retirement on the 29th July, 1969 if he was retained in Delhi on this or other post. This coincided with his present tenure. But vast as the Delhi Secretariat is, no job was found for him. This confirms us in our view ' of the matter that he was being sent away not because of exigency of service but definitely because he was not required for reasons connected with his work and conduct. The appeal is thus allowed with costs here and in the High Court. R.K.P.S. Appeal allowed.

The appellant joined the Indian Civil Service in 1933 and was thereafter allotted to the State of Assam. On July 29, 1964 he was appointed as Secretary to the Government of India "until 'further orders". On June, 20, 1966 he received a letter from the Cabinet Secretary advising him that in relation to the question of building up a higher level of administrative efficiency it had been decided by the Government that the appellant should revert to his parent State, or proceed on leave preparatory to retirement, or he should agree to accept some post lower than that of Secretary to the Central Government. After the appellant had made representations to the Cabinet Secretary and the Prime Minister, he received another letter from the Cabinet Secretary in September, 1966. affirming the Government 's decision that the appellant 's services would be placed at the disposal of his parent State of Assam or he could proceed on leave preparatory to retirement. The appellant challenged these orders by a writ petition under article 226 of the Constitution on the ground that the orders were violative of article 311(2). The High Court dismissed the petition and a Letters Patent appeal was also rejected. It was contended on behalf of the appellant that the reversion of the appellant to the Assam Service amounted to a reduction in his rank on the ground that he held a higher post in the Government of India and there was no post equal to it under the Assam Government; the post of the Chief Secretary in the Assam Government was equal to the Post of a Joint Secretary in the Government of India and his reversion would therefore indirectly mean a reduction in his rank and also in his emoluments because the highest post in Assam did not carry a salary equal to that of a Secretary in the Government of India. He also contended that the letters from the Cabinet Secretary spoke of his unsatisfactory work and cast a stigma on him; his reversion must, therefore, be treated as a penalty and as the procedure laid down under article 311(2) was not followed, the orders of the Government of India could not be sustained. On the other hand it was contended on behalf of the Government that the appellant was on deputation and the deputation could be terminated at any time; that his orders of appointment clearly showed that the appointment was "until further orders" and he had no right to continue in the Government of India if his services were not required; his reversion to his parent State did not amount either to any reduction in rank or a penalty and the orders were therefore quite legal. HELD : allowing the appeal, It was clear on the facts that the appellant was being reduced in rank with a stigma upon his work without following the procedure laid down in article 311(2) of the Constitution. [229 G H] 221 As a Secretary to the Central Government the appellant held a tenure post, which was normally for a period of five years and he could expect to continue in that post until 29th July, 1969. Nothing turned upon the words of the notification "until further orders" because all appointments to tenure posts had the same kind of order. He was not therefore on a deputation which could be terminated at any time. The fact that it was found necessary to break into the appellants 's tenure period close, to its end must be read in conjunction with the three alternatives offered to him and these clearly demonstrated that the intention was to reduce him in rank by sheer pressure of denying him a Secretaryship. [229 B D] The letter addressed to the appellant in June, 1966, containing the ,Offer of a lower post in Delhi was a clear pointer to the fact of his (]emotion. It clearly told him that his reversion was not due to any exigency of service but because he was found wanting. This was not a case of reverting the appellant to Assam at the end of a deputation or tenure and the final alternative that he could retire clearly showed that the Government was bent upon removing him from his present post. As there was no post in the Assam State Service carrying the same emoluments as those of a Secretary to the Central Government, on the facts of the present case the appellant 's reversion to Assam meant a reduction in rank within the meaning of article 311(2). [228 A B; 229 F]

Civil Appeal No. 1 of 1954, and Civil Appeal No. 7 of 1954. Appeals under article 132(1) of the Constitution of India from the Judgment and Order dated the 12th September, 1952, of the High Court of Judicature at Bombay in Civil Application No. 880 of 1952 and Miscellaneous Application No. 212 of 1952 respectively. N.C. Chatterjee and U. M. Trivedi (H. H. Dalal and I. N. Shroff with them) for the appellants in Appeal No., I of 1954. Rajinder Narain for the appellants in Civil Appeal. No. 7 of 1954. M. C. Setalvad and C.K. Daphtary (G. N. Joshi and Porus A. Mehta, with them) for the respondents in both the appeals. Mach 18. The Judgment of the Court was delivered by MUKHERJEA J. These two connected appeals are directed against a common judgment of a division Bench of the Bombay High Court, dated the 12th of September, 1952, by which the learned Judges dismissed two petitions under article 226 of the Constitution presented respectively by the appellants in the two appeals. 1057 The petitioners in both the cases assailed the consti tutional validity of the Act, known as the Bombay Public Trusts Act, 1950 (Act XXIX of 1950), which was passed by the Bombay Legislature with a view to regulate and make better provisions for the administration of the public and religious trusts in the State of Bombay. By a notification, dated the 30th of January, 1951, the Act was brought into force on and from the 1st of March, 1951, and its provisions were made applicable to temples, maths and all other trusts, express or constructive, for either a public, religious or charitable purpose or both. The State of Bombay figures as the first respondent in both the appeals and the second respondent is the Charity Commissioner, appointed by the first respondent under section 3 of the impugned Act to carry out the provisions of the Act throughout the State of Bombay. In one of the appeals, namely, Appeal No. 1 of 1954, the Assistant Charity Commissioner for the region of Baroda has been impleaded as the third respondent. The appellant in Appeal No. I of 1954 is a Swetamber Murtipujak Jain and a resident of Vejalpar in the district of Punchmahals within the State of Bombay. He is a Vahivatdar or manager of a Jain public temple or Derasar situated in the same village and the endowed properties appertaining to the temple are said to be of the value of Rs. 5 lakhs. The petition, out of which this appeal arises, was filed by the appellant on the 29th of May, 1952, before the High Court of Bombay, in its Appellate Side, against the three respondents mentioned above, praying for the issue of a writ in the nature of mandamus or direction ordering and directing the respondents to forbear from enforcing or taking any steps for the enforcement of the Bombay Public Trusts Act, 1950,,or of any of its provisions and parti cularly the provisions relating to registration of public and religious trusts managed by the appellant and payment of contributions levied in respect the same. The grounds urged in support of the petition were that a number of provisions of the Act convicted with the fundamental rights of the petitioner guaranteed under articles 25 and 26 of the Constitution and that the 1058 contribution levied on the trust was a tax which it was beyond the competence of the State Legislature to impose. A similar application under article 226 of the Consti tution and Praying for almost the identical relief was filed by the appellants, in the other appeal, namely, Appeal No. 7 of 1954 before the High Court in its Original Side on the 4th of August, 1952. The petitioners in this case purport to be the present trustees of the Parsi Punchayet Funds and Properties in Bombay registered under the Parsi Public Trusts Registration Act of 1936. These properties constitute one consolidated fund and they are administered by the trustees for the benefit of the entire Parsi community and the income is spent for specified religious and charitable purposes of a public character as indicated by the various donors. The petitioners, challenged the validity of the Bombay Public Trusts Act, 1950, substantially on the grounds that they interfered with the freedom of conscience of the petitioners and with their right freely to profess, practise and propagate religion and also with their right to manage their own affairs in matters of religion and thereby contravened the provisions of articles 25 and 26 of the Constitution. The levy of contribution under section 58 of the Act was also alleged in substance and effect to be a tax on public, religious and charitable trusts, a legislation upon which it was beyond the competency of the State Legislature to enact. As practically the same questions were involved in both the petitions, the learned Chief Justice of Bombay directed the transfer of the later petition from the Original Side to the Appellate Side of the High Court and both of them were heard together by a Division Bench consisting of the Chief Justice himself and Shah J. Both the petitions were disposed of by one and the same judgment delivered on the 12th of September, 1952, and the learned Judges rejected all the contentions put forward on behalf of the respective applicants and dismissed the petitions. The petitioners in both the cases have now come before us in appeal on the strength of certificates granted 1059 by the High Court under article 132(1) of the Constitution. To appreciate the points that have been canvassed before us by the parties to these appeals, it may be convenient to refer briefly to the scheme and salient features of the impugned Act. The object of the Act, as stated in the preamble, is to regulate and make better provisions for the administration of public, religious and charitable trusts within the State of Bombay. It includes, within its scope, all public trusts created not merely for religious but for purely charitable purposes as well and extends to people of all classes and denominations in the State. The power of superintendence and administration of public trusts is vested, under the Act, in the Charity Commissioner, who is to be appointed by the State Government in the manner laid down in Chapter II. The State Government may also appoint such number of Deputy and Assistant Charity Commissioners as. it thinks fit and these officers would be placed in charge of particular regions or particular trusts or classes of trusts as may be considered necessary. Section 9, with which Chapter III of the Act beigins, defines what 'charitable purposes ' are, and sections 10 and 11 lay down that a public trust shall not be void on the ground of uncertainty, nor shall it fail so far as a religious and charitable purpose is concerned, even if a non charitable or non religious purpose, which is includ ed in it,. cannot be given effect to. Chapter IV provides for registration of public trusts. Section 18 makes it obligatory upon the trustee of every public trust to which the Act applies, to make an application for the registration of the trust, of which he is the trustee. In case of omission on the part of a trustee to comply with this provision, he is debarred under section 31 of the Act from instituting a suit to enforce any right on behalf of such trust in a court of law. Chapter V deals with accounts and audit. Section 32 imposes a duty upon every trustee of a public trust, which has been registered under the Act, to keep regular accounts. Under section 33, these accounts are to be audited annually, in such manner as may be prescribed. 1060 Section 34 proscribes it to be the duty of the auditor to prepare balance sheets and to report all irregularities in the accounts. Section 35 lays down how trust money has to be invested, and section 36 prohibits alienation of immovable trust property except by way of leases for specified periods, Without the previous sanction of the Charity Commissioner. Section 37 authorises the Charity Commissioner and his subordinate officers to enter on and inspect or cause to be entered on and inspected any property belonging to a public trust. A proviso is added to the section laying down that in entering upon any such property, the officers making the entry shall give reasonable notice to the trustee and shall have due regard to the religious practices and usages of the trust. Among other powers and functions of the Charity Commissioner, which are detailed in Chapter VII, section 44 enables a Charity Commissioner to be appointed to act as a trustee of a public trust by a court of competent jurisdiction or by the author of the trust. Section 47 deals with the powers of the court to appoint new trustee or trustees and under clause (3) of this section, the court, after making enquiry, may appoint the Charity Commissioner or any other person as a trustee to fill up the vacancy. Section 48 provides for the levy of administrative charges in cases where the Charity Commissioner is appointed a trustee. Section 50 appears to be a substitute for section 92 of the Civil Procedure Code and contains provisions of almost the same character in respect to suits regarding public trusts. One of the reliefs that can be claimed in such a suit is a declaration as to what proportion of the trust property or interest therein shall be allocated to any particular object of the trust. Section 55 purports to lay down the rule of cy pres in relation to the administration of religious and charitable trusts; but it extends that doctrine much further than is warranted by the principles laid down by the Chancery Courts in England or recognised by judicial pronouncements in this country. Section 56 deals with the powers of the courts in relation to the application of the cy pres doctrine. Section 57 provides for the establishment of a fund to be called "The 1061 Public Trusts Administration Fund which shall vest in the Charity Commissioner and clause (2) lays down what sums shall be credited to this fund. Section 58 makes it obligatory on every public trust to pay to this fund a contribution at such time and in such manner as may be Prescribed. Under the, rules prescribed by the Government on this subject, the contribution has been fixed at the rate of 2 per cent. per annum upon the gross annual income of every public trust. Failure .to pay this contribution will make the trustee liable to the penalties provided for in section 66 of the Act. Section 60 provides that the Public Trusts Administration Fund shall, subject to the provisions of the Act and subject to the general and special orders of the State Government, be applicable to the. payment of charges for expenses incidental to the regulation of public trusts and generally for carrying out the provisions of the Act. Sections 62 to 66, which are comprised in Chapter IX of the Act, deal with the appointment and qualifications of assessors. The function of the assessors is to assist and advise the Charity Commissioner or his subordinate officers in the matter of making enquiries which may be necessary under the provisions of the Act. Chapter X prescribes the penalties that will be inflicted on trustees in case of their violating any of the pro visions of the Act. Chapter XI deals with procedural matters in connection with jurisdiction of courts and rights of appeal, and the twelfth or the last chapter deals with certain miscellaneous matters. These, in brief, are the provisions of the Act which are material for our present purpose. The contentions that have been raised by the learned counsel, who appeared in support of the appeals, may be considered under two heads. In the first place, a number of provisions of the Act have been challenged as invalid on the ground that they conflict with freedom of religion and the right of the religious denominations or sects, represented by the appellants in each case, to manage their own, affairs in matter of religion guaranteed under articles 25 and 26 of the Constitution. The sections of the Act, the validity of which has been challenged on this ground are sections 18, 31 to 37, 44, 1062 47, 48 50, clauses (e) and (g), 55, 58 and 66. The second head of the appellants argument relates to the levy of contribution as laid down in sections 57 and 58 of the Act and the argument is that this being in substance the levy of a tax, it was beyond the competence of the State Legislature to enact such a provision. As regards the first branch of the contention, a good deal of argument has been advanced before us relating to the measure and extent of the fundamental rights guaranteed under articles 25 and 26 of the Constitution. It will be necessary to address ourselves to this question at the outset, because without a clear appreciation of the scope and am bit of the fundamental rights embodied in the two articles of the Constitution, it would not be possible to decide whether there has been a transgression of these rights by any of the provisions of the Act. This identical question came up for consideration before this court in Civil Appeal No. 38 of 1953 (The commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Tirtha Swamiar(1) and it was discussed at some length in our judgment in that case. It will be sufficient for our present purpose to refer succinctly to the main principles that this court enunciated in that judgment. Article 25 of the Constitution guarantees to every person and not merely to the citizens of India the freedom of conscience and the right freely to profess practise and propagate religion. This is subject, in every case, to public order, health and morality. Further exceptions are engrafted upon this right by clause (2) of the article. Sub clause (a) of clause (2) saves the power of the State to make laws regulating or restricting any economic financial, political or other secular activity which may be associated with religious practice; and sub clause (b) reserves the State 's power to make laws providing for social reform and social welfare even though they might interfere with religious practices. Thus, subject to the restrictions which this article imposes, every person has a fundamental right under our Constitution not merely to entertain such religious belief as may be approved of by his judgment or conscience but to exhibit his belief and ideas in such (1) ; 1063 overt acts as are enjoined or sanctioned by his religion and further to propagate his religious views for the edification of others. It is immaterial also whether the propagation is made by a person in his individual capacity or on behalf of any church or institution. The free exercise of religion by which is meant the performance of outward acts in pursuance of religious belief, is, as stated above, subject to State regulation imposed to secure order, public health and morals of the people. What sub clause (a) of clause (2) of article 25 contemplates is not State regulation of the religious practices as such which are protected unless they run counter to public health or morality but of activities which are really of an economic, commercial or political character though they are associated with religious practices. So far as article 26 is concerned, it deals with a particular aspect of the subject of religious freedom. Under this article, any religious denomination or a section of it has the guaranteed right to establish and maintain institutions for religious and charitable purposes and to manage in its own way all affairs in matters of religion. Rights are also given to such denomination or a section of it to acquire and own movable and immovable properties and to administer such properties in accordance with law. The language of the two clauses (b) and (d) of article 26 would at once bring out the difference between the two. In regard to affairs in matters of religion, the right of management given to a religious body is a guaranteed fundamental right which no legislation can take away. On the other hand, as regards administration of property which a religious denomination is entitled to own and acquire, it has undoubtedly the right to administer such property but only in accordance with law. This means that the State can regulate the administration of trust properties by means of laws validly enacted but here again it should be remembered that under article 26 (d), it is the religious denomination itself which has been given the right to administer its pro perty in accordance with any law which the State may validly impose. A law, which takes away the right of 138 1064 administration altogether from the religious denomination and vests it in any other or secular authority, would amount to violation of the right which is guaranteed by article 26 (d) of the Constitution. The moot point for consideration, therefore, is where is the line to be drawn between what are matters of religion and what are not ? Our Constitution makers have made no attempt to define what 'religion ' is and it is certainly not possible to frame an exhaustive definition of the word 'religion ' which would be applicable to all classes of persons. As has been indicated in the Madras case referred to above, the definition of religion given by Fields J. in the American case of Davis vs Beason(1), does not seem to us adequate or precise. "The term 'religion" ', thus observed the learned Judge in the case mentioned above, "has refer ence to one 's views of his relations to his Creator and to the obligations they impose of reverence for His Being and character and of obedience to His Will. It is often confounded with cultus or form of worship of a particular sect, but is distinguishable from the latter". it may be noted that 'religion ' is not necessarily theistic and in fact there are well known religions in India like Buddhism and Jainism which do nor believe in the existence of God or of any Intelligent First Cause. A religion undoubtedly has its basis in a system of beliefs and doctrines which are regarded by those who profess that religion to be conducive to their spiritual well being, but it would not be correct to say, as seems to have been suggested by one of the learned Judges of the Bombay High Court, that matters of religion are nothing but matters of religious faith and religious belief. A religion is not merely an opinion, doctrine or belief. It has its outward expression in acts as well. We may quote in this connection the observations of Latham C. J. of the High Court of Australia in the case of Adelaide Company vs The Commonwealth(2), where the extent of protection given to religious freedom by section 116 of the Australian Constitution came up for consideration. (1)133 U.S. 33 (2) ; , 124. 1065 "It is sometimes suggested in discussions on the subject of freedom of religion. that, though the civil Government should not interfere with religious opinions, it nevertheless may deal as it pleases with any acts which are done in pursuance of religious belief without infringing the principle of freedom of religion. It appears to me to be difficult to maintain this distinction as relevant to the interpretation of section 116. The section refers in express terms to the exercise of religion, and therefore it is intended to protect from the operation of any Commonwealth laws acts which are done in the exercise of religion. Thus the section goes far beyond protecting liberty of opinion. It protects also acts done in pursuance of religious belief as part of religion. , In our opinion, as we have already said in the Madras case, these observations apply fully to the provision regarding religious freedom that is embodied in our Constitution. Religious practices or performances of acts, in pursuance of religious belief are as much apart of religion as faith or belief in particular doctrines. Thus if the tenets of the Jain or the Parsi religion lay down that certain rites and ceremonies are to be performed at certain times and in a particular manner, it cannot be said that these are secular activities partaking of commercial or economic character simply because the involve expenditure of money or employment of priests or the use of marketable commodities. No outside authority has any right to say that these are not essential parts of religion and it. is not open to the secular authority of the State to restrict or prohibit them in any manner they like under the guise of administering the trust estate. Of course, the scale of expenses to, be incurred in connection with these religious observances may be and is a matter of administration of property belonging to religious institutions; and if the expenses on these heads are likely to deplete the endowed properties or affect the stability of the institution,, proper control can certainly be exercised by State agencies as the law provides. We may refer in this connection to the observation of 1066 Davar J. in the case of Jamshedji vs Soonabai(1), and although they were made in a case where the question was whether the bequest of property by a Parsi testator for the purpose of perpetual celebration of ceremonies like Muktad baj, Vyezashni, etc., which are sanctioned by the Zoroastrian religion were valid charitable gifts, the observations, we think, are quite appropriate for our present purpose. "If this is the belief of the community" thus observed the learned Judge, "and it is proved undoubtedly to be the belief of the Zoroastrian community, a secular Judge is bound to accept that belief it is not for him to sit in judument on that belief, he has no right to interfere with the conscience of a donor who makes a gift in favour of what he believes to be the advancement of his religion and the ,Welfare of his community or mankind". These observations do, in our opinion, afford an indication of the measure of protection that is given by article 26(b) of our Constitution. The distinction between matters of religion and those of secular administration of religious properties may, at times, appear to be a thin one. But in cases of doubt, as Chief Justice Latham pointed out in the case(2) referred to above, the court should take a common sense view and be actuated by considerations of practical necessity. It is in the light of these principles that we will proceed to examine the different provisions of the Bombay Public Trusts Act, the validity of which has been challenged on behalf of the appellants. We will first turn to the provisions of the Act which relate to registration of trusts. Under section 18, it is incumbent on the trustee of every public, religious or charitable trust to get the same registered. Section 66 of the Act makes it an offence for a trustee not to comply with this provision and prescribes punishment for such offence. Section 31 provides for further compulsion by laying down that no suit shall lie on behalf of a public trust to enforce its right in any court of law unless the trust is registered. A compulsory payment (1) (2) Vide Adelaide Company vs The commonwealth, 67 C.L.R. 116, i29. 1067 of a fee of Rs. 25 has also been prescribed by the rules framed by the Government for registration of a trust. The provisions of registration undoubtedly have been made with a view to ensure due supervision of the trust properties and the exercise of proper control over them. These are matters relating to administration of trust property as contemplated by article 26(d) of the Constitution and cannot, by any stretch of imagination be held to be an attempt at interference with the rights of religious institutions to manage their religious affairs. The fees leviable under section 18 are credited to the Public Trust Administration Fund constituted under section 57 and are to be spent for meeting the charges incurred in the regulation of public trusts and for carrying into effect the provisions of the Act. The penalties provided are mere consequential provisions and involve no infraction of any fundamental right. It has been argued by the learned counsel for the appellants that according to the tenets of the Jain religion the property of the temple and its income exist for one purpose only, viz., the religious purpose, and a direction to spend money for purposes other than those which are considered sacred in the Jain scriptures would constitute interference with the freedom of religion. This contention does not appear to us to be sound. These expenses are incidental to proper management and administration of the trust estate like payment of municipal rates and taxes, etc., and cannot amount to diversion of trust property for purposes other than those which are prescribed by any religion. The next group of sections to which objections have been taken comprises sections 32 to 37. Section 32 compels a trustee of a public trust to keep accounts in such form as may be prescribed by the Charity Commissioner. Section 33 provides for the auditing of such accounts and section 34 makes it the duty of the auditor to prepare balance sheets and to report irregularities, if any, that are found in the accounts. These are certainly not matters of religion and the objection raised with regard to the validity of these provisions seem to be altogether baseless Section 35 relates to investment of money belonging to trusts. It is a well 1068 settled principle of law that trustees in charge of trust properties should not keep cash money in their hands which are not necessary for immediate expenses; and a list of approved securities upon which trust money could be invested is invariably laid down in every legislation on the subject of trust. There is nothing wrong in section 36 of the Act. Immovable trust properties are inalienable by their very nature and a provision that they could be alienated only with the previous sanction of the Charity Commissioner seems to us to be a perfectly salutary provision. Section 37 has been objected to on the ground that an unrestricted right of entry in any religious premises might offend the sentiments of the followers of that religion; but the section has expressly provided that the officers making the entry shall give reasonable notice of their intended entry to the trustees and shall have due regard to the religious practice and usages of the trust. Objection has next been taken to sections 44 and 47 of the Act. Section 44 lays down that the Charity Commissioner can be appointed to act as trustee of a public trust by a court of competent jurisdiction or by the author of the trust. If the author of the trust chooses to appoint the Charity Commissioner a trustee, no objection can possibly be taken to such action; but if the court is authorised to make such appointment, the provisions of this section in the general form as it stands appear to us to be open to serious objection. If we take for example the case of a religious institution like a Math at the head of which stands the Mathadhipati or spiritual superior. The Mathadhipati is a trustee according to the provisions of the. Act and if the court is competent to appoint the Charity Commissioner as a superior of a Math,. the result would be disastrous and it would amount to a flagrant violation of the constitutional guarantee which religions institutions have under the@ Constitution in regard to the management of its religious affairs. This is not a secular affair at all relating to the administration of the trust property. The very object of a Math is to maintain a competent line of religious teachers for propagating and strengthening the religious 1069 doctrines of a particular order or sect and as there could be no Math without a Mathadhipati as its spiritual head, the substitution of the Charity Commissioner for the superior would mean a destruction of the institution altogether. The evil is further aggravated by the provision of clause (4) of the section which says that the Charity Commissioner shall be the sole trustee and it shall not be lawful to appoint him as a truste along with other persons. In our opinion, the provision of section 44 relating to the appointment of the Charity Commissioner as a trustee of any public trust by the court without any reservation in regard to religious institutions like temples and Maths is unconstitutional and must be held to be void. The very same objections will apply to the provisions of clauses (3) to (6) of section 47. The court can certainly be empowered to appoint a trustee to fill up a vacancy caused by any of the reasons mentioned in section 47(1), and it is quite a salutary principle that in making the appointment the court should have regard to matters specified in clause (4) of section 47 ; but the provision of clause (3) to the extent that it authorises the court to appoint .the Charity Commissioner as the trustee and who according to the provisions of clause (5) is to be the sole trustee cannot be regarded as valid in regard to religious institutions of the type we have just indicated. To allow the Charity Commissioner to function as the Shebait of a temple or the superior of a Math would certainly amount to interference with the religious affairs of this institution. We hold accordingly that the provisions of clauses (3) to (6) of section 47 to the extent that they relate to the appointment of the Charity Commissioner as a trustee of a religious trust like temple and Math, are invalid. If these provisions of section 47 are eliminated, no objection can be taken to the provision of section 48 as it stands. This section will in that event be confined only to cases where the Charity Commissioner has been appointed a trustee by the author of the trust himself and the administrative charges provided by this section can certainly be levied on the trust. 1070 We now come to section 50 and exception has been taken to clauses (e) and (g) of that section. It is difficult to see how these provisions can at all be objected to. Section 50, as has been said above, is really a substitute for section 92 of the Civil Procedure Code and relates to suits in connection with public trusts Clause (e) of section 50 is an exact reproduction of clause (e) of section 92 of the Civil Procedure Code and clause (g) also reproduces substantially the provision of clause (g) of section 92 of the Civil Procedure Code. There is no question of infraction of any fundamental right by reason of these provisions. A more serious objection has been taken by the learned counsel for the appellants to the provisions of sections 55 and 56 of the impugned Act and it appears to us that the objections are to a great extent well founded. These sections purport to lay down how the doctrine of cy pres is to be applied in regard to the administration of public trust of a religious or charitable character. The doctrine of cy pres as developed by the Equity Courts in England, has been adopted by out Indian courts since a long time past. The provisions of sections 55 and 56, however, have extended the doctrine much beyond its recognised limits and have further ,introduced certain principles which run counter to well established rules of law regarding the administration of charitable trusts. When the particular purpose for which a charitable trust is created fails or by reason of certain circumstances the trust cannot be carried into effect either in whole or in part, or where there is a surplus left after exhausting the purposes specified by the settlor, the court would not, when there is a general charitable intention expressed by the settlor, allow the trust to fail but would execute it cy pres, that is to say, in some way as nearly as possible to that which the author of the trust intended. In such cases, it cannot be disputed that the court can frame a scheme and give suitable directions regarding the objects upon which the trust money can be spent. It is we 11 established, however, that where the donors intention can be given effect to, the court has no authority to sanction any deviation from the intentions expressed 1071 by the settlor on the grounds of expediency and the court cannot exercise the power of applying the trust property or its income to other purposes simply because it considers them to be more expedient or more beneficial than what the settlor had directed(1). But this is exactly what has been done by the provision of section 55(c) read with section 56 of the Act. These provisions allow a diversion of property belonging to a public trust or the income thereof to objects other than those intended by the donors if the Charity Commissioner is of opinion, and the court confirms its opinion and decides, that carrying out wholly or partially the original intentions of the author of the trust or the object for which the trust was created is not wholly or partially expedient, practicable, desirable or necessary; and that the property or income of the public trust or any portion thereof should be applied to any other charitable or religious object. Whether a provision like this is reasonable or not is not pertinent to our enquiry and we may assume that the legislature, which is competent to legislate on the subject of charitable and religious trust, is at liberty to make any provision which may not be in consonance with the existing law; but the question before us is, whether such provision invades any fundamental right guaranteed by our Constitution, and we have no hesitation in holding that it does so in the case of religious trusts. A religious sect or denomination has the undoubted right guaranteed by the Constitution to manage its own affairs in matters of religion and this includes the right to spend the trust property or its income for the religious purposes and objects indicated by the founder of the trust or established by usage obtaining in a particular institution. To divert the trust property or funds for purposes which the Charity Commissioner or the court considers expedient or proper, although the original objects of the founder can still be carried out, is to our minds an unwarrantable encroachment on the freedom of religious institutions in regard to the management of their religious affairs. It is perfectly true, as has been stated (1) Vide Halsbury, 2nd Edn., VOl. IV, P. 228, 139 1072 by the learned counsel for the appellants, that it is an established maxim of the Jain religion that Divadraya or religious property cannot be diverted to purposes other than those which are considered sacred in the Jain scriptures. But apart from the tenets of the Jain religion, we consider it to be a violation of the freedom of religion and of the right which a religious denomination has under our Constitution to manage its own affairs in matters of religion, to allow any secular authority to divert the trust money for purposes other than those for which the trust was created. The State can step in only when the trust fails or is incapable of being carried out either in whole or in part. We hold, therefore, that clause (3) of section 55, which contains the offending provision and the corresponding provision relating to the powers of the court occurring in the latter part of section 56(1), must be, held to be void. The only other section of the Act to which objection has been taken is section 58 and it deals with the levy of contribution upon each public trust, at certain rates to be fixed by the rules, in proportion to the gross annual income of such trust. This together with the other sums specified in clause (2) of section 57 makes up the Public Trusts Administration Fund, which is to be applied for payment of charges incidental to the regulation of public trusts and for carrying into effect the provisions of this Act. As this contribution is levied purely for purposes of due administration of the trust property and for defraying the expenses incurred in connection with the same, no objection could be taken to the provision of the section on the ground of its infringing any fundamental rights of the appellants. The substantial, contention that has been raised in regard to the validity of this provision comes, however, under the second head of the appellants ' arguments indicated above. The contention is that the contribution which is made payable under this section is in substance a tax and the Bombay State Legislature was not competent to enact such provision within the limits of the authority exercisable by it under the Constitution. This raises a point of some importance which requires to be examined carefully. 1073 It is not disputed before us that if the contribution that is levied under section 58 is a tax, a legislation regarding it would be beyond the competence of the State Legislature. Entries 46 to 62 of List II in Schedule VII of the Constitution specify the different kinds of taxes and duties in regard to which the State Legislature is empowered to legislate and a tax of the particular type that we have here is not covered by any one of them. It does not come also under any specific entry in List III or even of List I. The position, therefore, is that if the imposition is held to be a tax, it could come either under entry 97 of List I, which includes taxes not mentioned in Lists II and III or under article 248 (1) of the Constitution and in either case it is Parliament alone that has the competency to legislate upon the subject. If, on the other hand, the imposition could be regarded as "fees", it can be brought under entry 47 of the Concurrent List, the Act itself being a legislation under entries 10 and 28 of that List. The whole controversy thus centers round a point as to whether the contribution leviable under section 50 is a fee or tax and what in fact are the indicia and characteristics of a fee which distinguish it from a tax. This identical question came up for consideration before this court in Civil Appeal No. 38 of 1953 referred to above, in, connection with the provision of section 76 of the Madras Religious and Charitable Endowments Act, and the view which we have taken in that case regarding the proper criterion for determining whether an imposition is a fee or tax is in substantial agreement with the view taken by the Bombay High Court in the present case. As the matter has been discussed at some length in the Madras case, it will not be necessary to repeat the same discussions 'over again. It will be enough if we indicate the salient principles that were enunciated by this court in its judgment in the Madras case mentioned above. We may start by saying that although there is no generic difference between a tax and a fee and in fact they are only different forms in which the taxing power of a State manifests itself, our Constitution has, in fact, made a distinction between a tax and a fee for, 1074 legislative purposes. While there are various entries in the three legislative lists with regard to various forms of taxation, there is an entry at the end of each one of these lists as regards fees ' which could be levied in respect of every one of the matters that are included therein .This distinction is further evidenced by the provisions of the Constitution relating to Money Bills which areembodied in articles 110 and 199. Both these articles provide that a bill should not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or for the demand or payment of fees for licences or fees for services rendered, whereas a bill relating to imposition, abolition or regulation of a tax would always be recckoned as a Money Bill. There is no doubt that a fee resembles a tax in many respects and the question which presents difficulty is, what is the proper test by which the one could be distinguished from the other? A tax is undoubtedly in the nature of a compulsory exaction of money by a public authority for public purposes, the payment of which is enforced by law. But the other and equally important characteristic of a tax is, that the imposition is made for public purpose to meet the general expenses of the State without reference to any special advantage to be conferred upon the payers of the tax. It follows, therefore, that although a tax may be levied upon particular classes of persons or particular kinds of property, it is imposed not to confer any special benefit upon individual persons and the collections are all merged in the general revenue of the State to be applied for general public purposes. Tax is a common burden and the only return which the taxpayer gets is participation in the common benefits of the State. Feees on the other hand, are payments primarily in the public interest, but for some special service rendered or some special work done for the benefit of those from whom the payments are demanded. Thus in fees there is always an element of quid pro quo which is absent in a tax. It may not be possible to prove in every case that the fees that are collected by the Government approximate to the expenses that are incurred by it in rendering any particular kind of services or in 1075 performing any particular work for the benefit of certain individuals. But in order that the collections made by the Government can rank as fees, there must be co relation between the levy imposed and the expenses incurred by the State for the purpose of rendering such services. This can be proved by showing that on the face of the legislative provision itself, the collections are not merged in the general revenue but are set apart and appropriated for rendering these services. Thus two elements are essential in order that a payment may be regarded as a fee. In the first place, it must be levied in consideration of certain services which the individuals accepted either willingly or unwillingly and in the second place, the amount collected must be ear marked to meet the expenses of rendering these services and must not go to the general revenue of the State to be spent for general public purposes. As has been pointed out in the Madras case mentioned above, too much stress should not be laid on the presence or absence of what has been called the Coercive element. It is not correct to say that as distinguished from taxation which is compuslory payment, the payment of fees is always voluntary, it being a matter of choice with individuals either to accept the service or not for which fees are to be paid. We may cite for example the case of a licence fee for a motor car. It is argued that this would be a fee and not a tax, as it is optional with a person either to own a motor car or not and in case be does not choose to have a motor car, he need not pay any fees at all. But the same argument can be applied in the case of a house tax or land tax. Such taxes are levied only on those people who own lands or houses and it could be said with equal propriety that a man need not own any house or land and in that event he could avoid the payment of these taxes. In the second place, even if the payment of a motor licence fee is a voluntary payment, it can still be regarded as a tax if the fees that are realised on motor licences have no relation to the expenses that the Government incurs in keeping an office or bureau for the granting of licences and the collections are not appropriated for that purpose but 1076 go to the general revenue. Judging by this test, it appears to us that the High Court was perfectly right in holding that the contributions imposed under section 58 of the Bombay Public Trusts Act are really feEs and not taxes. In the first place, the contributions, which are collected under section 58, are to be credited to the Public Trusts Administration Fund as constituted under section 57. This is a special fund which is to be applied exclusively for payment of charges for expenses incidental to the regulation of public trusts and for carrying into effect the provisions of the Act. It vests in the Charity Commissioner and the custody and investments of the moneY belonging to the funD and the disbursement and pAyment therefrom are to be effected not in the manner in which general revenues are disbursed, but in the way prescribed by the rules made under the Act. The collections, therefore, are not merged in the general revenue, but they axe earmarked and set apart for this particular purpose. it is true that under section 6A of the Act, the officers and servants appointed under the Act are to draw their pay and allowances from the Consolidated Fund of the State but we agree with what has been said by Mr. Justice Shah of the Bombay High Court that this provision is made only for the purpose of facilitating the administration and not with a view to mix up the fund with the general revenue, collected for Government purposes. This would be clear from the provision of section 6B which provides that out of. the Public Trusts Administration Fund all the costs, which the State Government may determine on account of pay, pension, leave and other allowances of all. the officers appointed under this Act, shall ' be paid. It is the Public Trusts Administration Fund, therefore, which meets all the expenses of the administration of trust property within the scheme of the Act, and it is to meet the expenses of this administration that these collections are levied. As has been said by the learned Judges of the High Court, according to the concept of a modern State, it is not necessary that services should be rendered only at the request of particular people, it is enough that payments are demanded for 1077 rendering services which the State considers beneficial in the public interests and which the people have to accept whether they are willing or not. Our conclusion, therefore, is that section 58 is not ultra vires of the State Legislature by reason of the fact that it is not a tax but a fee which comes within the purview of entry 47 of List III in Schedule VII of the Constitution. The result, therefore, is that in our opinion the appeals are allowed only in part and a mandamus will issue in each of these cases restraining the State Government and the Charity Commissioner from enforcing against the appellants the following provisions of the Act to wit : (i) Section 44 of the Act to the extent that it relates to the appointment of the Charity Commissioner as a trustee of religious public trust by the court, (ii) the provisions of clauses (3) to (6) of section 47, and (iii) clause (c) of section 55 and the part of clause (1) of section 56 corresponding thereto. The other prayers of the appellants stand dismissed. Each party will bear hi own costs in both the appeals.

Held, that the provision of a. 44 of the Bombay Public Trust Act, 1950, relating to the appointment of the Charity Commissioner as a trustee of any public trust by the court without any reservation in regard to religious institutions like temples and Maths is unconstitutional and must be held to be void. The provisions of el. (3) to (6) of a. 47 of the Act to the extent that they relate to the appointment of the Charity Commissioner as a trustee of a religious trust like temple and Math are unconstitutional and must be held to be void. A religious sect or denomination has. the undoubted right guaranteed by the Constitution to manage its own affairs in matters of religion and this includes the right to spend the trust property or its income for religion and for religious purposes and objects indicated by the founder of the trust or established by ussage 137 1056 obtaining in a particular institution. To divert the trust property or funds for purposes which the Charity commissioner or the court considers expedient or proper, although the original objectes of the founder can still be carried out, is an unwarrantable encroachment on the freedom of religious institutions in regard to the management of their religious affairs. Therefore cl. (3) of section 55, which contains the offending provision and the corresponding provision relating to the powers of the court occurring in the latter part of section 56(1), must be held to be void. Section 58 of the Act is not ultra vires of the State Legislature because the contribution imposed under the section is not a tax but a fee which comes within the purview of entry 47 of List III in Schedule VII of the Constitution. Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar, ( ; Davis vs Beason ; , Adelaide Company vs The Commonwealth ; , 124) and Tamshed Ji vs Soonabai [1919] (I.L.R referred to.

Civil Appeal No. 515 (NCE) of 1983. From the Judgment and Order dated the 7th January, 1983 of the Himachal Pradesh High Court in Election Petition No. 6 of 1982. V. K.Chitre and B. R. Agrawala for the Appellant. Dr. N. M. Ghatate for the Respondent. The Judgment of the Court was delivered by BALAKRISHNA ERADI, J. This being an election appeal filed under section 116A of the Representation of the People Act, 1951 (hereinafter called 'the Act ') calling for urgent determination, as soon as the hearing of arguments in the appeal was completed we announced our decision by passing the following order: 65 "We are of the view that for reasons which we shall state later, the nomination paper of the appellant was validly accepted by the Returning Officer and we accordingly allow the appeal and set aside the order of the High Court invalidating the election of the appellant. There will be no order as to costs of the appeal. " We now proceed to set out our reasons for reaching the aforesaid conclusion. General Elections to the Himachal Pradesh Vidhan Sabha were held in May, 1982. Ganu Ram, the appellant herein, Rikhi Ram Kaundal (first respondent) and three others had contested the 23 Gehrwin Assembly Constituency seat which is a seat reserved for scheduled caste candidates only. The nominations filed by all these five candidates had been accepted as valid by the Returning Officer and the polling took place on May 19, 1982. The result of the election was announced on May 22, 1982 and the appellant was declared elected form the said reserved constituency by reason of his having secured 7477 votes as against his nearest rival Rikhi Ram Kaundal (first respondent) who had polled only 6901 votes. On July 3, 1983 Rikhi Ram Kaundal filed an election petition in the High Court under sections 81, 100 and 101 of the Act challenging the validity of the election of the appellant on three grounds. The first ground urged was that the nomination paper filed by the appellant was not in order inasmuch as it did not contain any declaration by the appellant specifying the particular caste of which he is a member and the area in relation to which the said caste has been declared to be a scheduled caste in the State. On this basis it was contended that the nomination paper of the appellant had been improperly accepted by the Returning Officer. The second ground of objection raised was that since the appellant had not made any declaration in the nomination paper regarding the particular scheduled caste to which he belonged, he should be deemed to be disqualified for being chosen to fill the seat in question 23 Gehrwin reserved constituency in view of the mandatory provisions contained in sub section (2) of section 33 of the Act. The third ground of objection put forward was that the appellant did not as a matter of fact, belong to any of the castes which had been declared as scheduled castes in relation to the State of 66 Himachal Pradesh and hence he was not qualified to stand sa a candidate from the aforesaid reserved constituency. The High Court upheld the first two objections raised by the election petitioner which related to the question of validity of the nomination paper and set aside the election of the appellant holding that the nomination paper of the appellant could not be regarded as valid in view of the fact that it did not contain a declaration by the appellant specifying the particular caste of which he is a member and the area in relation to which he said caste is a scheduled caste in the State. The third contention by the respondent election petitioner was however, rejected by the High Court since the Court found on a consideration of the evidence adduced in the case that the appellant did, in fact, belong to the 'Lohar ' caste which has been declared as a schedule caste in the State of Himachal Pradesh. Aggrieved by the judgment of the High Court setting aside his election and unseating him, the appellant has come up to this Court with this appeal. Section 33 of the Act deals with the topic of presentation of nomination paper and requirements for a valid nomination. Sub section (2) of the said section which alone is relevant for our present purpose reads: "(2) In a constituency where any seat is reserved, a candidate shall not be deemed to be qualified to be chosen to fill that seat unless his nomination paper contains a declaration by him specifying the particular caste or tribe of which he is a member and the area in relation to which that caste or tribe is a Scheduled Caste or, as the case may be, a Scheduled Tribe of the State. " It is not disputed that in the nomination form filed by the appellant and his proposer, no written declaration had been made specifying the caste to which the appellant belongs and the area in relation to which that caste is a scheduled caste of the State. But it is common ground that along with the nomination paper the appellant had filed as annexure thereto a certificate issued by the Sub Divisional Magistrate, Ghumarwin certifying that the appellant belonged to a scheduled caste namely 'Lohar '. The said certificate was appended to the nomination paper obviously with the sole purpose and intention of making it known to the Returning Officer and all others concerned that the appellant is filing his nomination 67 as a candidate belonging to a scheduled caste namely 'Lohar ' and it was in proof of that assertion and for eliminating doubt or controversy in the matter that the Sub Divisional Magistrate 's certificate was produced. The High Court has taken the view that since section 33 of the Act requires that the nomination paper must be in the prescribed form and Form 2B is a self contained one, the filing of any enclosure or certificate along with the Form is not contemplated. We are unable to agree with this view. When the nomination paper has been made in the prescribed form there is no legal prohibition against the other requisite particulars being furnished in a separate paper appended to the form instead of writing them out in the form itself. This is very often done in the matter of filing returns of Income tax, Wealth tax etc. In such cases the annexure appended to the form should be treated as part of the nomination paper. We are therefore of opinion that the certificate which was produced by the appellant as an annexure to the nomination paper has to be treated as forming part of the nomination paper and the declaration contained therein that the appellant belongs to the scheduled caste of 'Lohar ' must be understood and treated as a declaration by the appellant in the nomination form within the meaning of sub section (2) of section 33. We have to remember that we are dealing with nomination papers pertaining to candidates belonging to scheduled castes and scheduled tribes, who, for well known historical reasons, are unfortunately, extremely backward socially, economically and educationally in comparison with other sections of our people. In such a context we consider that the Court has to place a liberal and benevolent interpretation on the provisions contained in section 33 (2) of the Act rather than adopt a narrow, rigid, technical and purely literal construction In section Sivaswami vs V. Malaikannan and others, which was also a case arising under the Act, one of us speaking on behalf of a three Judge Bench of this Court had occasion to make the flowing observations which are apposite to the present context also: "In this context it is necessary to remember that nearly 90 per cent of the electorate in this country consists of illiterate and uneducated rural folk totally unacquainted with the intricacies of the rules & technicalities of procedure pertaining to elections. Even if the best of endeavour is made explain to them such complicated rules and procedures they may not be capable of grasping and fully understanding all the implications and actually carrying them into effect 68 while exercising their franchise. If the right conferred on the people to choose their representatives to the State Legislatures and the Parliament through the process of free and fair elections is to be meaningful the will of the illiterate and unsophisticated voter expressed through a marking on the ballot paper which though not strictly inside the column of the particular candidate is clearly indicative of the identity of the candidate for whom the vote is cast has to be respected and given its full effect. " It is manifest that the legislative purpose underlying subsection (2) of section 33 of the Act is that when a nomination paper is filed in respect of a reserved seat in any constituency there must be a clear specification by the candidate of the particular caste or tribe to which he belongs and the area in relation to which that caste or tribe is a scheduled caste or scheduled tribe of the State. This requirement is fully satisfied in the present case because by producing the certificate of the Sub Divisional Magistrate as an annexure to his nomination paper the appellant had clearly made it known that he was filing the nomination as a candidate belonging to the 'Lohar ' caste, which is admittedly a scheduled caste in the entirety of the area of the State of Himachal Pradesh. It is also significant that no objection whatever was raised against the nomination filed by the appellant at the time of scrutiny. The Returning Officer had published a notice of nominations under section 35 of the Act and in the said notice it was expressly stated that the appellant had filed his nomination as a candidate belonging to the scheduled caste namely 'Lohar '. Having regard to all the facts and circumstances of the case and the legal position as explained above, we consider that the High Court was in error in holding that the nomination paper filed by the appellant was not valid and its acceptance by the Returning Officer was improper. A faint attempt was made before us by the learned counsel appearing on behalf of the first respondent to make out that the finding entered by the High Court that the appellant does, in fact, belong to the scheduled caste 'Lohar ' is erroneous and unsupported by the evidence but we see no merit at all in the said contention. 69 The said finding recorded by the High Court is hereby confirmed. The conclusion that emerges from the foregoing discussion is that the High Court was not justified in setting aside the election of the appellant on the ground that the nomination paper filed by the appellant was invalid. It follows that this appeal has to be allowed and the order of the High Court invalidating the election of the appellant has to be set aside. H.S.K. Appeal allowed.

section 33(2) of the Representation of the People Act requires that when a nomination paper is filed in respect of a reserved seat in any constituency there must be a clear specification by the candidate of the particular caste or tribe to which he belonged and the area in relation to which that caste or tribe was a scheduled caste or scheduled tribe of the State. The appellant, in order to contest State assembly election filed his nomination paper without making the declaration in the nomination paper itself but filed as annexure thereto a certificate issued by the Sub Divisional Magistrate certifying that the appellant belonged to a scheduled caste namely 'Lohar '. The nominating paper was accepted by the Returning Officer and the appellant successfully contested the election. The respondent, who lost in the election, challenged the election of the appellant on the ground inter alia that in the absence of the requisite declaration prescribed by section 33(2), the nomination paper of the appellant was invalid and was wrongly accepted. The High Court took the view that since section 33 of the Act required that the nomination paper must be in the prescribed form the filing of any enclosure or certificate along with form was not contemplated. Hence this appeal. Allowing the appeal, ^ HELD: When the nomination paper has been made in the prescribed form, there is no legal prohibition against the other requisite particulars being furnished in a separate paper appended to the form instead of 64 writing them out in the form itself. The annexure appended the form should be treated as part of the nomination paper. [67 B C] While dealing with nomination papers pertaining to candidates belonging to scheduled castes and scheduled tribes, who, for well known historical reasons, are unfortunately, extremely backward socially, economically and educationally in comparison with other sections of our people, the Court has to place a liberal and benevolent interpretation on the provisions contained in section 33(2) of the Act rather than adopt a narrow, rigid, technical and purely literal construction. [67 E F] section Sivaswami vs V. Malalkannan and other, [1984] 1 SCC 296, referred to. In the instant case the requirement of section 33(2) is fully satisfied. The certificate which was produced by the appellant as an annexure to the nomination paper has to be treated as forming part of the nomination paper and the declaration contained therein that the appellant belongs to the 'Lohar ' caste which is admittedly a scheduled caste in the entirety of the area concerned, must be understood and treated as a declaration by the appellant in the nomination form within the meaning of sub section (2) of section 33. Therefore the High Court was in error in holding that the nomination paper filed by the appellant was not valid and its acceptance by the Returning officer was improper. [68D E; G]

160 of 1952. Contempt of Court proceedings against the Editor, Printer and Publisher of the "Times of India" (Daily), Bombay and Delhi, for publishing a leading article in their paper of October 30, 1952, entitled A Disturbing Decision ". M. C. Setalvad, Attorney General for India (P. A. Mehta, with him) (amicus curiae). N. C. Chatterjee (Nur ud Din Ahmad and A. E. Dutt, with him) for the contemners. December 12. The Order of the Court was delivered by MAHAJAN J. In its issue of the 30th October, 1952, the " Times of India", a daily newspaper published in Bombay and New Delhi, a leading article was published under the heading " A disturbing decision ". The burden of it was that in a singularly oblique and infelicitous manner the Supreme Court had by a majority decision tolled the knell of the much maligned dual system prevailing in the Calcutta and Bombay High Courts by holding that the 217 right to practise in any High Court conferred on advocates of the Supreme Court, made the rules in force in those High Courts requiring advocates appearing on the Original Side to be instructed by attorneys inapplicable to them. The article concluded with the following passage: " The fact of the matter appears to be that in the higher legal latitudes at New Delhi and elsewhere the dual system is regarded as obsolete and anomalous. There is a tell tale note at the top of the rules framed by the Supreme Court for enrolment of advocates and agents to the effect that the rules were subject to revision and the judges had under consideration a proposal for abolishing the dual system. Abolish it by 'all means if the system has outgrown its usefulness and is found incongruous in the new setting of a democratic Constitution. But to achieve a dubious or even a laudable purpose by straining the law is hardly edifying. Politics and policies have no place in the pure region of the law; and courts of law would serve the country and the Constitution better by discarding all extraneous considerations and uncompromisingly observing divine detachment which is the glory of law and the guarantee of justice." No objection could have been taken to the article had it merely preached to the courts of law the sermon of divine detachment. But when it proceeded to attribute improper motives to the judges, it not only transgressed the limits of fair and bona fide criticism but had a clear tendency to affect the dignity and prestige of this Court. The article in question was thus a gross contempt of court. It is obvious that if an impression is created in the minds of the public that the judges in the highest court in the land 'act on extraneous considerations in deciding cases, the confidence of the whole community in the administration of justice is bound to be undermined and no greater , mischief than that can possibly be imagined. It was for this reason that the rule was issued against the respondents. 218 We are happy to find that the Editor, Printer and the Publisher of the paper in their respective affidavits filed in these proceedings have frankly stated that they now realize that in the offending article they had exceeded the limits of legitimate criticism in that words or expressions which can be construed as casting reflection upon the court and constituting Contempt had crept into it. They have expressed sincere regret and have tendered unreserved and unqualified apology for this first lapse of theirs. We would like to observe that it is not the practice of this Court to issue such rules except in very grave and serious cases and it is never over sensitive to public criticism; but *hen there is danger of grave mischief being done in the matter of administration of justice,. the animadversion cannot be ignored and viewed with placid equanimity. In this 'matter we are of the same opinion as was expressed by their Lordships of the Privy Council in Andre Paul vs Attorney General of Trinidad (1), Where they observed as follows: "The path of criticism is A public way: the wrong headed are permitted to err therein; provided that members of the public abstain from imputing improper motives to those taking part in the administration of justice, and are genuinely exercising a right of criticism and not acting in malice or attempting to impair the administration of justice, they are immune. Justice is not a cloistered virtue; she must be allowed to suffer the scrutiny and respectful even though outspoken comments of ordinary men. " In view of the unconditional apology tendered by the respondents and the undertaking given by them to give wide publicity to their regret, we have decided to drop further proceedings and we accept the apology and discharge the rule without any order as to costs. Rule discharged. Agent for the contemners: Rajinder Narain. (1) A.I.R. 1936 P.C. 141.

It is not the practice of the Supreme Court to issue a rule for contempt of Court except in very grave and serious cases and it is never over sensitive to public criticism; but when there is danger of grave mischief being done in the matter of administration of justice, the animadversion will not be ignored and viewed with placid equanimity. A leading article in the " Times of India " on the judgment of the Supreme Court in Aswini Kumar Ghose vs Arabinda Bose and Another ([1953] S.C.R. 1) contained the following statements: "the fact of the matter is that in the higher legal latitudes in Delhi the dual system was regarded as obsolete and anomalous. . There is a, tell tale note at the top of the rules framed by the Supreme Court for enrolment of advocates and agents to the effect that the rules were subject to revision and the Judges had under consideration a proposal for abolishing the dual system. . To achieve a dubious or even a laudable purpose by straining the law is hardly 216 edifying. Politics and policies have no place in the pure region of the law and Courts of law would serve the country and the Constitution better by discarding all extraneous considerations and uncompromisingly observing divine detachment. . " In proceedings for contempt of Court: Held, that if the articles had merely preached to Courts of law a sermon of divine detachment no objection could be taken, but in attributing improper motives to the judges, the article not only transgressed the limits of fair and bona fide criticism but had a clear tendency to affect the dignity and prestige of the Court and it was therefore a gross contempt of court. If an impression is created in the minds of the public that the judges of the highest court in the land act on extraneous considerations in deciding cases the confidence of the whole community in the administration of justice is bound to be undermined and no greater mischief than that can possibly be imagined. [In view of the unconditional apology tendered by the Editor, Printer and Publisher and the undertaking given by them to give wide publicity to their regret, the proceedings were dropped.] Andrew Paul vs Attorney General of Trinidad (A.I.R. referred to.

N: Criminal Appeal Nos. 345 346 of 1991. From the Judgement and Order dated 14.6.1990 of the Madras High Court in Referred Trial Nos. 4/89 and 5/89 and Crl. Appeal Nos. 593/89 and 594 of 1989. 715 Raju Ramachandran, Jaga Rao, Alok Agarwal, Ms. Malini Bhat and section Ravindra Bhatt for the appellants. V.R. Karthikeyan and V. Krishnamurthy for the respondent. The Judgment of the Court was delivered by K. RAMASAWAMY, J. Special leave to appeals granted. Heard the learned counsel, Sri Raju Ramachandran amicus curiae for the appellants and Sri V. Krishnamurthy, the learned Standing Counsel for the State. The appellants Sevaka Perumal and Isakkimuthu for short 'A 1 ' and 'A 2 ' in Appeal arising out of S.L.P. (Crl.) No. 1842/90 are accused in Sessions Case No. 283 of 1986 on the file of the Addl. Sessions Judge, Tirunelveli Sessions Division and appellants in Criminal Appeal No. 594 of 1989 and R.T. No. 4 of 1989 by judgment, dated June 14, 1990 of the High Court of Madras. Criminal Appeal arise out of S.L.P. (Crl.) No. 1841/90; Sessions Case No. 284 of 1986 of the same Sessions Division and Criminal Appeal No. 593 and R.T. No. 5 of 1989 dated June 14, 1990 of the Madras High Court respectively, A 1 is the appellant. In each case the Sessions Court convicted them under sections 120B, 364, 392 read with section 397; section 302 read with section 34 I.P.C. and sentenced to death. In Crl. Appeal No. 594 of 1989 and R.T. No. 4 of 1989, the High Court confirmed the conviction and sentence of death of both the appellants. In Crl. Appeal No. 593 of 1989 and R.T. No. 5 of 1989, the High Court confirmed the conviction and sentenced of death of the A 1 and acquitted A 2 of all the charges. The case of the prosecution in brief is that the appellants and PW 1, the approver belonged to kidarakulam village and became friends. A 1 used to bring money form the timber shop of his brother in law (PW 4) in Sessions Case No. 284/86 in whose shop A 1 had worked. They used to go to various places. A 1 used to purchase ganja from chenglapatai and other places and A 1 and A 2 used to sell them. Yet they did not have enough money to spend lavishly. They attempted to commit theft in the localities but became impracticable. Therefore, they conspired to entice boys from affluent families to bring cash and jewellery from their houses; take them to far away places; take their money or jewellery and to murder them for gain. Pursuant thereto in 1978 they murdered one Athippan; in 1981 one Chelladurai; in March, 1982 one Hariramachandran and in 1983 one Christodas. In Sessions Case No. 283/86, the deceased boy is Athiappan. In 716 Sessions Case No. 284/86, the deceased boy is Hariramachandran. Sessions Case No. 282/86 on the file of the Sessions Court. Madurai Division relates to deceased Chelladurai. Therein also we are informed that the appellants were convicted but on appeal they were acquitted. In sessions Case relating to the death of Christodas, it also ended in conviction and sentence of death was imposed on the appellants and is pending confirmation in the High Court. It is sufficient to set out the material fact leaving out the minor details in Sessions Case No. 284/86 to meet the points raised by the counsel for the appellants. A 1 enticed the deceased, Hariramachandran, his nephew (elder sister PW 2 ' son) to bring jewellery from the house of PW 2 and PW 4. The appellants and PW 1 took him to Madurai. On the way the deceased went to the house of PW 3 and handed over one chain to be delivered to his mother and took M.O. 1 chain with him. A 1 had taken a room in the lodge at Madurai run by PW 16. On coming to know that they were staying in Madurai, PW 2, PW 4, her husband and PW 3 went to the lodge and the deceased was found threat. He informed them that the chain was with A 1 and he would come in the evening at 8.00 p.m. After waiting for some time and when it was getting dark, the ladies went away asking PW 4 to get the chain and the deceased after A 1 's arrival. While PW 4 was waiting the deceased went down stairs and after A 1 's arrival told him of his mother 's coming etc. and from there they went away to Madras, and having come to know that they left the place PW 4 left to his village. On the next day they returned to Madurai. From there they went to Usilampatti and A 1 then purchased a knife at the Bus Stand without the knowledge of the deceased and proceeded to Peraiyar road. They sat near a jungle stream. While A 1 and the deceased Harirmachandran were sitting near a stone on the southern side of the road, A 2 and PW 1 were standing at a distance, A 1 stabbed Harirmachandran in his stomach with a knife and the deceased collapsed on the stone. A 1 threw away the knife in the river. He threw the deceased in the nearby well and washed his hands and legs in the stream. They returned to Usilampatti Bus Stand. From there they came to Madurai. A 1 sold M.O. 1 chain to PW 24 and gave one hundred rupees each to PW 1 and A 2. This evidence of PW 1 received sufficient corroboration from the evidence of prosecution witnesses. Sri Raju Ramachandran contended that the dead body was admittedly found in a highly decomposed condition. There is no proper identification of the dead body to be of the deceased. The 717 mother PW 2 identified only with reference to the photograph taken of the dead body. There is evidence that the deceased wrote a letter of leaving to unknown destination. Unless there is proof that the dead body belongs to Hariramachandran, it is not safe to convict to A 1 to a capital punishment of death sentence. We find no force in the contention. In a trial for murder it is not an absolute necessity or an essential ingredient to establish corpus delicti. The fact of death of the deceased must be established like any other fact. Corpus delicti in some cases may not be possible to be traced or recovered. Take for instance that a murder was committed and the dead body was thrown into flowing tidal river or steam or burnt out. It is unlikely that the dead body may be recovered. If recovery of the dead body, therefore, is an absolute necessity to convict an accused, in many a case the accused would manage to see that the dead body is destroyed etc. and would afford a complete immunity to the guilty from being punished and would escape even when the offence of murder is proved. What, therefore, is required to base a conviction for an offence of murder is that there should be reliable and acceptable evidence that the offence of murder, like any other factum, of death was committed and it must be proved by direct or circumstantial evidence, although the dead body may not be traced. In this case the evidence of PWs. 7 to 10 would establish that they have seen the dead body of the deceased Hariramachandran in the well and brought it out and the photograph was taken at the time of inquest. It was identified to be that of the deceased by no other than his mother, PW 2. Thus we have no hesitation to hold that there is no doubt as regards the identity of the dead body and that the medical evidence establishers that the deceased died due to stabbing with sharp edged weapon like knife. It is next contended that PW 1 being an approver, his evidence must be reliable and must receive corroboration on all material particulars from independent evidence. PW 1 is neither a reliable witness nor did his evidence receive such corroboration. Therefore, his evidence cannot form the basis to convict the appellants. It is his contention that in Hariramachandran 's death case the evidence of PW 1 was not accepted as regards the complicity of A 2 and he was acquitted. Therefore, PW 1 is not a reliable witness. This contention too is devoid of any force. PW 1 had given wealth of details of commission of the crimes. Under section 133 of the Evidence Act 1 of 1872, an accomplice shall be a competent witness against an accused person; and a conviction is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice. Section 114 illustration (b) postulates that an accomplice is unworthy of credit, unless he is corroborated in mate 718 rial particulars. In King vs Baskervilli, Lord Reading, CJ, laid the test that the corroboration need not be direct evidence that the accused committed the crime. It is merely circumstantial evidence of his connection with the crime. The nature of the corroboration will depend and vary according to the particular circumstances of each case. What is required is some additional evidence rendering it probable that the story of the accomplice is true and that it is reasonably safe to act upon. In Mahadeo vs The King AIR 1936 P. C. 242 the judicial committee held that the evidence of an accesory must be corroborated in some material particulars not only bearing upon the facts of the crime but upon the accused 's implication in it. This Court in Rameshwar vs The State of Rajasthan, ; held that it is not necessary that there should be independent confirmation of every material circumstance in the sense that the independent evidence of the case, apart from the testimony of the complainant or its accomplice should in itself be sufficient to sustain conviction. All that is necessary is that there should be independent evidence which will make it reasonably safe to believe that the witness 's story that the accused was the one that committed the offence could be acceptable. The corroboration need not be direct evidence that the accused committed the crime. It is sufficient if it is merely circumstantial evidence of his connection with the crime. In section Swaminathan vs State of Madras, AIR 1957 SC 340 this Court held that corroboration of approver 's evidence need not be of a kind which prove the offence against the accused. It is sufficient if it connects the accused with the crime when the accused had been charged for the offences of conspiracy and of cheating, a specific instance of cheating proved beyond doubt against one of the accused would furnish the best corroboration of the offence of the conspiracy. In Sarwan Singh vs The State of Punjab, ; relied by Shri Raju Ramachandran, this Court held that the approver must be a reliable witness and the evidence must receive sufficient corroboration. In that case the corroboration of minor particulars was accepted to be sufficient to hold the approver to be reliable witness. In B.D. Patil vs State of Maharashtra, this Court held that the conviction of an accused on the testimony of an accomplice cannot be said to be illegal, yet the courts will, as a matter of practice do not accept the evidence of such a witness without corroboration in material particulars. There should be corroboration of the approver in material particulars and must be qua each accused. In Md. Hussain Umar Kochra etc. vs K.S. Dalipsinghji & Anr., [1970] 1 S.C.R. 130 it was held that the combined effect of sections 133 and 114(b) is that though a conviction based upon accomplice evidence is legal the court will not accept such evidence unless it is 719 Corroborated in material particulars. The corroboration must be from an independent source. If several accomplices simultaneously and without previous concert giving consistent account of the crime implicating accused, the court may accept the several statements as corroborating each other. In Ram Narain vs State of Rajasthan, ; this Court held that section 114(b) strikes a note of warning, cautioning the court that an accomplice does not generally deserve to be believed unless corroborated in material particulars. In other words, the rule is that the necessity of corroboration is as matter of prudence except when it is safe to dispense with such corroboration must be clearly present to the mind of the Judge. In Abdul Sattar vs Union Territory, Chandigarh, [1985] (Suppl.) S.C.C. 599 this Court further held that it is not safe to convict an accused on the charges like murder upon the evidence of uncorroborated testimony of the approver. Thus the settled law is that an approver is a competent witness against the accused person. But the court, to satisfy its conscience, insists as caution and prudence to seek, as a rule, corroboration to the evidence of the approver, a particips criminis from independent evidence occular or circumstantial, of general particulars regarding the story spoken off by the approver of the commission of the crime and the part played by the accused therein to find whether it is true and worthy of acceptance. The reliability of the evidence of an approver should be considered from totality of the facts and circumstances. In the trial of Athiappan murder there is no dispute that such a corroborative evidence connecting both the appellants is available which was minutely considered by the trial court and the High Court and was accepted. We find no infirmity in that regard. In the trial of the death of Hariramachandran, A. 2 was acquitted on the ground that his extra judicial confession made to P.W. 23, the only corroborative evidence,was disbelieved by the High Court. Both the courts below gave categorical finding that P.W. 1 is a reliable witness. the evidence of the approver received corroboration from independent evidence on general prosecution case, namely, P.W. 16 spoke that the deceased was brought by the accused and stayed in the lodge. P.Ws 2 to 4 spoke of A 1 working in their shop, previous theft by A 1 and M.O. 1 being missing, their attempt to take back the deceased and M.O, 1, the deed body was found in the well and was taken out as spoke to by P. Ws. 7to 10. The medical evidence establishes the stabbing with the knife and death was due to it. P.W. 24 corroborates A. 1 of selling M.O. 1 chain and taking the money. The canopy of the material evidence from independent sources sufficiently corroborates the approver ' evidence. 720 PW 1 is a reliable witness. No infirmity has been pointed out to disbelieve his evidence. It is next contended that the courts below were not justified in imposing the extreme penalty of death sentence under section 302, I.P.C. and strongly relied upon the judgment of Bachan Singh 's case. It is contended that the acquittal of A. 2 giving the benefit of doubt in Hariramachandran 's death trial introduces an element of doubt which should be extended to convert the death sentence of A. 1 to life imprisonment. We find no susbstance in the contention. The doctrine of benefit of doubt only would operate in proof of the commission of the offence. If there is any reasonable doubt, not the doubt of vacillating mind of a Judge, the accused is entitled to the benefit and acquitted. The benefit of doubt again does not enter in the area of consideration of imposing sentence. The law regulates social interest, arbitrates conflicting claims and demands. Security of persons and property of the people is an essential function of the State. It could be achieved through instrumentality of criminal law. Undoubtedly, there is a cross cultural conflict where living law must find answer to the new challenges and the courts are required to mould the sentencing system to meet the challenges. The contagion of lawlessenss would undermine social order and lay it in ruins. Protection of society and stamping out criminal proclivity must be the object of law which must be achieved by imposing appropriate sentence. Therefore, law as a corner stone of the edifice of order should meet the challenges confronting the society. Friedman in his "Law in Changing Society" stated that, "State of criminal law continues to be as it should be a decisive reflection of social consciousness of society". Therefore, in operating the sentencing system, law should adopt the corrective machinery or the deterrence based on factual matrix. By deft modulation of sentencing process be stern where it should be, and tempered with mercy where it warrants to be. The facts and given circumstances in each case, the nature of the crime, the manner in which it was planned and committed, the motive for commission of the crime, the conduct of the accused and all other attending circumstances are relevant facts which would enter into the area of consideration. For instance a murder committed due to deep seated personal rivalry may not call for penalty of death. But an organised crime or mass murders of innocent people would call for imposition of death sentence as deterrence. In Mahesh vs State of M.P., this Court while refusing to reduce that death sentence observed thus: 721 `It will be a mockery of justice to permit the accused to escape the extreme penalty of law when faced with such evidence and such cruel acts. To give the lesser punishment for the accused would be to render the justicing system of the country suspect. The common man will lose faith in courts. In such cases, he understands and appreciates the language of deterrence more than the reformative jargon '. Therefore, undue sympathy to impose inadequate sentence would do more harm to the justice system to undermine to public confidence in the efficacy of law and society could not long endure under serious threats. If the courts did not protect the injured, the injured would then resort to private vengeance. It is, therefore, the duty of every court to award proper sentence having regard to the nature of the offence and the manner in which it was executed or committed etc. It is clear from the evidence that the accused indulged in illegal business of purchase and sale of ganja. They conspired to entice innocent boys from affluent families took them to far flung places where the dead body could not be identified. The letters were written to the parents purporting to be by the deceased to delude the parents that the missing boy would one day come home alive and that they would not give any report to the police and the crime would go undetected. Four murders in a span of five years were committed for gain in cold blooded , pre meditated and planned way. It is undoubted that if the trial relating to Athiappan murder had taken place and concluded earlier to the trial and conviction of other three murders, the subsequent murders are not relevant facts to be considered. But in this case the trial of the murder relating to Athiappan and Hariramachandran practically took place simultaneously by which date the appellants were convicted for the murder of Chelladurai and Christodas. Therefore ,the reference of conviction and sentence by the Sessions Court to those two cases also are relevant facts. The deceased Hariramachandran is no other than the nephew (elder sister 's son) of A 1. This would establish his depravity and hardened criminality. No regard for precious lives of innocent young boys was shown. They adopted the crime of murder for gain as a means to living. Undoubtedly under section 235(2) of Code of Criminal Procedure, the accused is entitled to an opportunity to adduce evidence and if need be the case is to be adjourned to another date. It is illegal to convict, an accused and to impose sentence on the same day. It is true 722 as contended for the State that under section 309, third proviso brought by Amendment Act, 1978 that no adjournment should be granted for the purpose only of enabling the accused person to show cause against sentence to be imposed upon him. Under section 235(2) when the accused has been given right to be heard on the question of sentence it is a valuable right. To make that right meaningful the procedure adopted should be suitably moulded and the accused given an opportunity to adduce evidence on the nature of the sentence. The hearing may be on the same day if the parties are ready or be adjourned to a next date but once the court after giving opportunity propose to impose appropriate sentence again there is no need to adjourn the case any further thereon. No doubt the Sessions Judge needed to adjourn the case under section 235(2) to next date but in the High Court the counsel was directed to show any additional grounds on the question of sentence . The High Court observed that the counsel was unable to give any additional ground. It is Further contended that the appellants are young men. They are the bread winners of their family each consisting of a young wife. minor child and aged parents and that, therefore, the death sentence may be converted into life. We find no force. These compassionate grounds would always be present in most cases and are not relevant for interference. Thus we find no infirmity in the sentence awarded by the Sessions Court and confirmed by the High Court warranting interference. The appeals are accordingly dismissed. G.N. Appeal dismissed.

According to the Prosecution, appellants 1 and 2 have been friends and were in the habit of selling ganja and spending money lavishly. They attempted to commit theft in their locality, but were no successful. Therefore, they hatched a conspiracy to entice boys from affluent families to bring cash and jewellery and murder them after taking away the cash and jewellary. Likewise, they killed 4 boys, in a span of about 5 years. Both of them were charged with offences under section 120B read with section 34 IPC, section 364 and 392 read with section 397 IPC in all the four cases filed against them, and were convicted by the Sessions Court. However, in one case, on appeal, they were acquitted by the High Court. In another case, the death sentence imposed by the Sessions Court is pending confirmation by the High Court. In the other two cases, both the appellants were sentenced to 712 death by the Sessions Court and on appeal the High Court confirmed the sentence in one case and in the other, the High Court confirmed the death sentence passed against appellant No. 1 and acquitted appellants No. 2 of all the charges. The appellants preferred the present appeals challenging the said order of the High Court confirming the sentences against them by contending that there was no proper identification of the dead body and that the approver was not a reliable witness and since his evidence did not receive corroboration, it cannot form the basis for convicting the appellants. It was also contended that the extreme penalty of death sentence imposed was not justified. Dismissing the appeals, this Court, HELD: 1.1 In a trial for murder it is not an absolute necessity or an essential ingredient to establish corpus delicti. The fact of death of the deceased must be established like any other fact. Corpus delicti in some cases may not be possible to be traced or recovered. If a murder was committed and the dead body was thrown into flowing tidal river or stream or burnt out, it is unlikely that the dead body may be recovered. If recovery of the dead body, therefore, is an absolute necessity to convict an accused, in many a case the accused would manage to see that the dead body is destroyed etc. and that would afford a complete immunity to the guilty from being punished and the accused would escape even when the offence of murder is proved. What, therefore, is required to base a conviction for an offence of murder is that there should be reliable and acceptable evidence that the offence of murder, like any other factum, of death was committed and it must be proved by direct or circumstantial evidence, although the dead body may not be traced. [717A D] 1.2 In the instant case, the evidence of PWs. 7 to 10 would establish that they have seen the dead body of the deceased in the well and brought it out and the photograph was taken at the time of inquest. It was identified to be that of the deceased by no other than the mother of the deceased. Thus there is no doubt as regards the identity of the dead body. Also the medical evidence establishes that the deceased died due to stabbing with sharp edged weapon like knife. [717E] 2. Law is settled that an approver is a competent witness against the accused person. But the court, to satisfy its conscience, insists as caution and prudence to seek, as a rule, corroboration to the evidence 713 of the approver, a particips criminis from independent evidence occular or circumstantial, of general particulars regarding the story spoken of by the approver of the commission of the crime and the part played by the accused therein to find whether it is true and worthy of acceptance. The reliability of the evidence of an approver should be considered from totality of the facts and circumstances. In one of the two trials there is no dispute that such a corroborative evidence connecting both the appellant is available which was minutely considered by the trial court and the High Court and was accepted. There is infirmity in that regard. In the other trial appellant No. 2 was acquitted on the ground that his extra judicial confession made to PW 23, the only corroborative evidence, was disbelieved by the High Court. Both the Courts below gave categorical finding that PW 1 is a reliable witness. The evidence of the approver received corroboration from independent evidence. The canopy of the material evidence from independent sources sufficiently corroborates the approver 's evidence. He is a reliable witness. No infirmity has been pointed out to disbelieve his evidence. [719D H; 720A] Rameshwar vs The State of Rajasthan, ; ; section Swaminathan vs State of Madras, AIR 1957 SC 340; Sarwan Singh vs The State of Punjab, , ; ; B.D. Patil vs State of Maharashtra, ; Md. Hussan Umar Kochra etc. vs K.S. Dalipsinghji & Anr., [1970] 1 SCR 130; Ram Narain vs State of Rajasthan, ; and Abdul Sattar vs Union Territory, Chandigarh, [1985] (Suppl.) SCC 599, relied on. King vs Baskervilli, and Mahadeo vs The King, AIR 1936 P.C. 242, referred to. In the instant case, it is clear from the evidence that the accused indulged in illegal business of purchase and sale of ganja. They conspired to entice innocent boys from affluent families, took them to far flung places where the dead body could not be identified. The letters were written to the parents purporting to be by the deceased to delude the parents that the missing boy would one day come home alive and that they would not give any report to the police and the crime would go undetected. Four murders in a span of five years were committed for gain in cold blooded, premeditated and planned way. In this case the trial of the murder relating to the two deceased practically took place simultaneously by which date the appellants were convicted for the murder of two other boys. Therefore, the reference of conviction and sentence by the Sessions Court to those two cases also are relevant facts. One of the deceased is no other than the nephew of appellants No. 1. This 714 would establish his depravity and hardened criminality. No regard for precious lives of innocent young boys was shown. They adopted the crime of murder for gain as a means to living. As such there is no infirmity in the sentence awarded by the Sessions Court and confirmed by the High Court. [721D G] 4. The doctrine of benefit of doubt only would operate in proof of the commission of the offence. If there is any reasonable doubt, not the doubt of vacillating mind of a Judge, the accused is entitled to that benefit and be acquitted. The benefit of doubt again does not enter in the area of consideration of imposing sentence. [720C] 5.1. Undue sympathy to impose inadequate sentence would do harm to the justice system to undermine the public confidence in the efficacy of law and society could not long endure under serious threats. If the courts did not protect the injured the injured would then resort to private vengeance. It is, therefore, the duty of every court to award proper sentence having regard to the nature of the offence and the manner in which it was executed or committed etc. [721C] 5.2. The compassionate grounds such as the accused being young bread winners of the family etc. would always be present in most casts and are not relevant for interference with the sentence. [722D] 6. Under section 235(2) when the accused has been given right to be heard on the question of sentence it is a valuable right. To make that right meaningful the procedure adopted would be suitably moulded and the accused given an opportunity to adduce evidence on the nature of the sentence. The hearing may be on the same day if the parties are ready or to a next date but once the court after giving opportunity, proposes to impose appropriate sentence again there is no need to adjourn the case under section 235(2) to next date. In the present matters the counsel was directed by the High Court to show any additional grounds on the question of sentence, but the counsel was unable to give any additional ground. [722B C]

vil Appeal No. 1845 (N) of 1974. From the Judgment and Decree dated 6/7.3.1974 of the Bombay High Court in First Appeal No. 586 of 1969. 133 S.K. Dholakia and H.S. Parihar for the Appellant. A.K. Ganguli, A.M. Khanwilkar, A. Subba Rao, C.V. Subba Rao and A.S. Bhasme for the Respondents. The appellant is a Limited Company registered under the Companies Act having its registered office situate at Ahmed nagar within the State of Maharashtra. The appellant carries on business, inter alia, as manufacturers of Ayurvedic preparations including "Asavas", "Aristhas". At all times material to this appeal, the appellant was manufacturing and selling an Ayurvedic product called "Ashvagandhaarist" which is a medicinal preparation containing self generated alcohol but not capable of being consumed as ordinary alcoholic beverage. Under the provisions of the Medicinal and Toilet Prepara tions . (Excise Duties) Act, 1955, hereinafter referred to as "the Act", which came into force on 1st April, 1957, excise duties were levied on medicinal and toilet prepara tions specified in the Schedule to the Act, hereinafter referred to as "the Schedule". The Act, as originally stood in 1955, inter alia, contained two items in the Schedule respectively specifying "medicinal and toilet preparations containing alcohol which are prepared by distillation or to which alcohol has been added and which are capable of being consumed as ordinary "alcoholic beverage" and "medicinal and toilet preparations not otherwise specified containing alcohol", being the commodities excisable under the provi sions of the Act. The said "Ashvagandhaarist" was treated and accepted by the Excise Authorities as being exempt from the payment of any excise duty upon the basis and the foot ing that the same was an Ayurvedic preparation containing self generated alcohol which was not capable of being con sumed as ordinary alcoholic beverage, and which fell under item 2(i) Of the Schedule in respect of which the rate of excise duty postulated in the Schedule was "Nil". The Act was amended by the Amendment Act 19 of 1961. The amendment, inter alia, introduced the concept of "patent and pro 134 prietary medicine" in the Schedule. The amendment Act, however, by an Explanation, introduced in the Schedule the definition of the "patent and proprietary medicine" con tained in the Drugs Act, 1940. Even after the introduction of the said amendment, the appellant 's aforesaid product continued to be treated as exempt from the liability to pay any excise duty on the self same ground, namely, that it was covered under item 2(i) of the Schedule which item 2(i) was renumbered as item 3(i) of the Schedule as amended by the Amendment Act of 1961. By Section 18 of the Finance Act, 1962, the Act was further amended by substitution of an Explanation No. 1 to the Schedule of the Act. By virtue of and under the said Explanation, a patent and proprietary medicine was defined as a medicinal preparation of the description and the type specified in the Explanation. The Explanation which was brought in by the Finance Act was given retrospective effect from April 23, 1962. In purported pursuance of the said Explanation and/or upon the basis thereof, a circular dated May 31, 1962 was issued by the then Director of Prohibition and Central Excise, Government of Maharashtra, Bombay which, inter alia, directed that the medicinal preparations containing self generated alcohol but not capable of being consumed as alcoholic beverage were to be treated as products falling under item 1 and not item 3 of the Schedule. consequent thereupon, the respondents levied and recovered from the appellant diverse sums aggregating to Rs.2, 18,282.16 being the alleged amount of the excise duty payable in respect of the product "Ashvagandharist". The amounts were paid by the appellant "under protest". With a view to enforcing their rights in respect thereof and/or recovering the said amount illegally recovered by the respondents, on July 14, 1965, the appellant filed a suit, being Special Suit No. 23 of 1965 in the Court of Civil Judge, Senior Division, Ahmednagar. On March 4, 1966, the respondent No. 4 filed its written statement and similarly on the 4th April, 1966 the respond ent Nos. 1 to 3 filed written statements. In the written statements, filed on behalf of the respondents it was, inter alia, contended that the said product of the appellant was "the unrestricted ayurvedic preparations" manufactured by the plaintiff (appellant) labelled and marked by the 135 plaintiff (appellant) under their brand name and trade mark. This, therefore, fell within the scope of patent or proprie tary medicine as given in Explanation 1 below the Schedule annexed to the Act, as inserted from April 23, 1962 by Finance Act (No. 2) 1962. By his Judgment and Decree dated March 27, 1969, the learned Civil Judge was pleased to decree the appellant 's suit for Rs.2,22,582.07 together with future interest at 6 per cent per annum from the date of the suit till realisa tion. Aggrieved by the Judgment and Order dated March 27, 1969, the respondents (being the defendants therein) pre ferred an appeal to the High Court of Judicature at Bombay, which was registered as First Appeal No. 586 of 1969. The said appeal was heard by the High Court alongwith other appeals being First Appeals Nos. 136 of 1968 and 93 of 1970 as also suits being Suit Nos. 230 of 1965 and 319 of 1965. The appeals and the suits were heard together having regard to the common questions of law involved therein. By its judgment and decree the High Court was pleased to allow the said first appeal of the respondents, reversing the judgment and decree of the Trial Court and to dismiss the appellant 's special suit. Hence this appeal by special leave. Mr. S.K. Dholakia, the learned counsel for the appellant submits, inter alia, that the findings of the High Court are repugnant to the relevant provisions of the Act and/or the rules framed thereunder and/or the scheme, intendments and purposes thereof. It is contended that the appellant 's product "Ashvagandhaarist" fell squarely within item 3(i) of the Schedule and as such wholly exempt from the payment of excise duty; that in view of the admitted position that until 1962 "Ashvagandhaarist" was exempt from the payment of excise duty as being a commodity falling under item No. 2(i) of the Schedule, simply by reason of the Explanation which was introduced in the Act by the Finance Act of 1962, as the explanation could never be considered to be or, in any event, in the scheme of the provision of the Act, was not a substantive provision of the Act and the explanation was not intended to and it did not seek to disturb the enumeration of the categories or the respective fields assigned to the various items of the schedule in existence prior thereto. It is submitted that item 3 of the amended Schedule was a specific item and enumerated categories of Ayurvedic medici nal preparations covered thereby and that being so, all commodities answering description set out therein fell within the 136 ambit thereof and was excluded from the purview of the other items contained in the said schedule and that the express language of item 3(i), namely, of "Ayurvedic preparations containing self generated alcohol which were not capable of being consumed as ordinary alcoholic beverages" were exempt ed and that the appellant 's product "Ashvagandhaarist" was admittedly and obviously an Ayurvedic preparation containing self generated alcohol which was not capable of being con sumed as ordinary alcoholic beverage and as such it could not be made excisable on the ground that it fell within any other item of the schedule but it constituted residuary clause of the schedule in so far as the medicinal and toilet preparations containing alcohol were concerned. Counsel further submits that the expression "not otherwise speci fied" occurring in item 3 of the schedule did not restrict the scope of the enumerated categories under item 3 but was merely a marginal note showing that the said item 3 was residuary item and comprised of three sub groups of commodi ties specified therein; and that item No. 1 was not a speci fied item. Mr. Dholakia further submits that the interpreta tion that "ashvagandhaarist" fell within item No. 1 rendered the provisions of item No. 3 wholly nugatory inasmuch as if an Ayurvedic preparation containing self generated alcohol but incapable of being used as ordinary alcoholic beverage, is treated as failing under item 1 there would be no Ayurvedic medicine which would factually fail under item 3 of the schedule and that the Explanation newly introduced by the Finance Act, 1962 could not add to, amend or alter or vary the classification of the goods existing prior thereto as covered by the various items of the said schedule; nor could it otherwise nullify or add to, amend or alter or vary the substantive provisions of the schedule and it could not be considered to be a substantive provision of the Act nor could it be allowed to abrogate the substantive provisions of the Act. In other words, the submission is that in view of the fact that the product of the appellant was exempt from payment of duty because the duty against item No. 3(i) in the amended Schedule of 1961 was mentioned to be 'nil ' the High Court ought to have held that the said legal and factual position could not be transformed to the detriment of the appellant by shifting the said commodity from the field covered by item 3(i) to that covered by item 1 of the Act merely on the basis of the Explanation which was intro duced by the Finance Act of 1962. Counsel argues that this was more so because "ashvagandhaarist" was not a name within the contemplation of the explanation but was merely a de scriptive appellation of the medicine manufactured and sold by the appellant and it being a standard preparation accord ing to the Ayurvedic system could be manufactured by any one conversant with the said system, and it did 137 not have a brand name in the hands of the appellant and the High Court 's interpretation that a mere description is a name is inconsistent with the scheme of the definition of "patent and proprietary medicines" in the Explanation. This was the reason, it is argued, why Asavas and Aristhas were expressly made non dutiable after 25.9.6,4. by subsequent amendment by the Government. Mr. A.K. Ganguli, learned counsel appearing for the respondents, demurring, submits that there can be no doubt that "Asavas" and "Aristhas" fall under item 1 of the sched ule to the Act as substituted by Finance Act 2 of 1962 and hence taxable at 10% ad valorem; and those being Ayurvedic preparations are specified preparations and they could never fail under item 3 or any part thereof which deals with medicinal preparations not otherwise specified containing alcohol. Item 1, Mr. Ganguli submits, specifically describes that medicinal and toilet preparation which has alcoholic contents and which alcohol comes to be present in those medicines by use of one of the two methods described in that item. First of such methods contemplates alcohol contents in the medicine which is prepared by distillation and the second method is addition of alcohol to the medicine. The medicinal preparation which is prepared by distillation and which contains alcohol and other medicinal preparations to which alcohol is added fall in category I and such medicines would cover medicinal preparations belonging either to Allopathic or Ayurvedic system or I any other system of medicines. For every system of medicines, counsel argues, item No. 1 is not general item but it is a specific item in the sense it covers only those medicines which are prepared by distillation and contain alcohol and others to which alcohol has been added. According to counsel, such medicines belonging to any system whether indigenous or foreign are covered by item 1 and would be taxable as per that item and the disputed goods are undoubtedly medicinal preparations and they are also patent and proprietary medicines in view of the Explanation 1 and these Ayurvedic preparations are medicinal preparations being patent or proprietary medicines containing alcohol which are not capable of being consumed as alcoholic beverages and as such they squarely fall under item 1 of the Schedule, and the main Act and the Explanation is a self contained provision which eliminates the reference either to Drugs Act or to the Rules made under the Act; and one has to read only the provision of the Schedule as a whole including the Explanation, and their meaning being simple and plain, they must be given their full effect. 138 To appreciate the rival contentions we can appropriately refer to the provisions and the Schedule of the Act and the legislative changes thereof. The Act was meant to provide for the levy and collection of duty of excise on medicinal and toilet preparations containing alcohol, opium, Indian hemp or other narcotic drug or narcotic. The statement of objects and reasons as notified in Gazette of India of 16.9.1954, Part II, section 2, Ext., page 596 said that by virtue of entry 40 in List II in the Seventh Schedule to the Gov ernment of India Act, 1935, medicinal and toilet prepara tions containing alcohol, etc., were subjected to Provincial excise duties. In order to secure uniformity the entry relating to excise duty on medicinal and toilet preparations containing alcohol, etc. were transferred under the Consti tution from the State list to the Union List. The Act was intended to implement this provision in the Constitution and proposed uniform rates of excise duty and a uniform proce dure for the collection thereof. The Act came in force on 1.4.57. The Act in Section 2(a) defined "alcohol" to mean "ethyl alcohol of any strength and purity having the chemical composition C2H5OH"; and it defined "medicinal preparation" in Section 2(g) to include "all drugs which are a remedy or prescription prepared for internal or external use of human beings or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in human beings or animals". It did not define "drug". The Drugs Act, 1940, as it was substituted by the Drugs (Amend ment) Act, 1955 (16.4.55) had defined "drug" in Section 2(b) to include "(i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of disease in human beings or animals other than medicines and substances exclusively used or prepared for use in accordance with the Ayurvedic or Unani systems of medicine; and (ii) such substances (other than food) intend ed to affect the structure or any function of the human body or intended to be used for the destruction of vermins or insects which cause disease in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette." (Emphasis supplied) Section 3(i) of the Act provides that "there shall be levied duties of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India. " The original Schedule to the Act in 1955 read: 139 THE SCHEDULE (See section 3) Item Description of dutiable Rate of No. goods. Medicinal and toilet preparations, Rupees seven containing alcohol, which are prepared and annas eig which are prepared by distilation or ht per gallon to which alcohol has been added, and of strength which are capable of being consumed as of London ordinary alcoholic beverages. proof spirit. Medicinal and toilet preparations not otherwise specified containing alcohol (i) Ayurvedic preparations containing Nil self generated alcohol, which are not capable of being consumed as ordinary alcoholic beverages. (ii) Ayurvedic preparations containing Rupees three self generated alcohol, which are per gallon. capable of being consumed as ordinary alcoholic beverages. (iii) All others. Rupees five per gallon of the strength of London proof spirit 3. Medical and toilet preparations, Nil not containing alcohol, but containing opium, Indian hemp, or other narcotic drug or narcotic. It would thus be clear that medicinal and toilet prepara tions were classified into those which were capable of being consumed as ordinary alcoholic beverages and those which were not capable of being consumed as ordinary alcoholic beverages. Again, medicinal and toilet preparations contain ing alcohol prepared by distillation or adding alcohol is differentiated from medicinal and toilet preparations 'not otherwise specified containing alcohol '. Further, under this 'not 140 otherwise specified ' category Ayurvedic preparations have been classified into three groups, namely, Ayurvedic prepa rations containing self generated alcohol not capable of being consumed as ordinary alcoholic beverages, those capa ble of being consumed as ordinary alcoholic beverages; and others. These three divisions were not drugs as defined in Drugs Act then. The first category of Ayurvedic preparations had not been subjected to duty while the other two catego ries had been. Admittedly, under the above Schedule the product of the appellant 'ashvagandhaarist ' was not dutiable which meant that it was included in item 2(i). It would also be clear that 'Ayurvedic preparations containing self generated alcohol which were capable of being consumed as ordinary alcoholic beverages ' were dutiable at the rate of Rupees 3 per gallon and the third category of others was also dutia ble at the rate of Rupees 5 per gallon on the strength of London proof spirit. Alcohol and self generated alcohol were treated differently. The Schedule was amended by the Amending Act No. 19 of 1961 and the amended Schedule stood as follows: Item No. Description of dutiable goods Rate of duty 1. Medicinal preparations, being patent Ten per cent or proprietary medicines, contain ad valorem. ing alcohol and which are not capable of being consumed as ordinary alcoholic beverages. Medicinal preparations, containing Rupees three alcohol, which are and eight prepared by distillation or to which five naye alcohol has been added, paise per and which are capable of being litre of consumed as ordinary alcoholic the streng beverages. th of Londo n proof spi rit. Medicinal preparations not otherwise specified containing alcohol (i) Ayurvedic preparations containing Nil self 'generated alcohol which are not capable of being consumed as ordinary alcoholic beverages. 141 (ii) Ayurvedic preparations, contain Thirty eight ing self generated alcohol, which naye paise per are capable of being consumed as litre. ordinary alcoholic beverages. (iii) All others. Rupee one and ten naye paise per litre of the strength of London proof spirit. Explanation I: "Patent or proprietary medicines" has the same meaning as in clause (h) of Section 3 of the Drugs Act, 1940 (23 of 1940). The statement of objects and reasons of the Amendment Bill, as published in Gazette of India, 8.3.1961, Pt. II, section 2, Ext., page 106, said: "Consequent on the decision to adopt metric units from the 1st April, 1961, in the sale of alcohol and collection of duty thereon, it is proposed to provide for the levy and collec tion of excise duty on medicinal and toilet preparations in terms of metric units. . . . . . . . Under existing item 2(ii) of the Schedule to the Act, Ayurvedic preparations containing self generated alcohol which are capable of being consumed as ordinary alcohol ic beverages are subjected to duty at the rate of Rs.3 per gallon. However, by virtue of the provision contained in section 19(2)(xix) of the Act, read with Rule 8 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956, the rate of duty with respect to such preparations has been reduced to Rs. 1.75 per gallon with effect from the 10th September, 1960, and it is this reduced rate that is, proposed to be expressed in terms of metric units in the Bill. " It would thus be clear that the main purpose was the levy and collection of excise duty on medicinal and toilet preparations in terms of metric unit. while there was refer ence to them existing item 2(ii) of the Schedule of the Act, namely, Ayurvedic preparations containing 142 self generated alcohol which were capable of being consumed as ordinary alcoholic beverages the duty whereof was reduced to Rs. 1.75 per gallon from Rs.3 per gallon, there was no mention that item No. 2(i) of the Schedule, namely, Ayurved ic preparations containing self generated alcohol which were not capable of being consumed as ordinary alcoholic bever ages was subjected to tax. The statement of object and reasons was silent about item No. 2(i). In the amended Schedule we find that item 1 for the first time mentioned medicinal preparations being patent or proprietary medicines, containing alcohol and which are not capable of being consumed as ordinary alcoholic beverages and the earlier item No. 1 has been re numbered as item No. 2 and the earlier item No. 2(i), (ii) and (iii) remained as they were as 3(i), 3(ii) and 3(iii). As regards levy of duty item 2(i) of the old Schedule was kept duty free in item 3(i) of the Schedule. Thus, there has been no fresh charging of duty on what was 2(i) and is now 3(i) under which catego ry the appellant 's product 'ashvagandhaarist ' was exempted from duty before the amendment of the Schedule. There is, therefore, no doubt that item 1 & 2(i) remained mutually exclusive or in other words, they would not be overlapping. Item 1 in the amended Schedule deals with medicinal prepara tions being patent or proprietary medicines and not medici nal preparations 'not otherwise specified. ' The Explanation I says that patent or proprietary medi cines has the same meaning as in clause (h) of Section 3 of the Drugs Act, 1940. The High Court has found that re num bered definition 3(h) was earlier 3(d) and read as follows: "3(d) 'Patent or proprietary medicine ' means a drug which is a remedy or prescription pre pared for internal or external use of human beings or animals, and which is not for the time being recognised by the Permanent Commis sion on Biological Standardisation of the World Health Organisation or in the latest edition of the British Pharmacopoeia or the British Pharmaceutical Codex or any other Pharmacopoeia authorised in this behalf by the Central Government after consultation with the Board." Thus, patent or proprietary medicines meant a drug which was defined in the Drugs Act and not in the Act. The High Court rightly held that Ayurvedic medicine was not a drug at all. The definition of drug expressly excluded them. So the definition of patent or proprietary medicine 143 was exclusive of Ayurvedic medicinal preparations, those being excluded from the definition of drug. The definition of patent and proprietary medicines till then did not apply to Ayurvedic preparations. This position continued indeed till the amendment of Drugs Act by the Drugs and Cosmetics (Amendment) Act, 1964. Several amendments were effected by that Amendment Act of 1964. Section 33A and Chapter IV A were inserted. Section 33A said that Chapter IV was not to apply to Ayurvedic (including Siddha) or Unani drugs. "Save as otherwise provided in this Act, nothing contained in this Chapter shall apply to Ayurvedic (including Siddha) or Unani drugs". Chapter IVA made.provisions relating to Ayurvedic (including Siddha) and Unani drugs. This shows that prior to this amendment of 1964 Ayurvedic preparations were expressly not drugs under the Drugs Act. The Drugs and Cosmetics Act in the amendment First Schedule after the amendment Act of 1964 included Ayurvedic (including Siddha) and Unani system drugs prepared under Section 3(a) which contains the definition: "Ayurvedic (including Siddha) or Unani drugs includes all medicines intended for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of disease in human beings and animals, mentioned and process and manufac ture exclusively in accordance with the formula prescribed in the authoritative book on Ayurvedic (Siddha) Unani system of medicines specified in the first schedule. " This defini tion was also inserted by Drugs and Cosmetics (Amendment) Act, 1964 (13 of 1964) Section 2(a)(i) with effect from 15.9.1964. The same exclusion remained in the related Central Acts. For example, the Drugs Control Act, 1950 (Act 26 of 1950) replaced the Drugs Control Ordinance, 1949 (6 of 1949) which was promulgated on 3.10. 1949 in order to ensure that cer tain essential imported drugs and medicines were sold in the reasonable price in the Chief Commissioner 's provinces. Similar ordinances were issued by all the provinces. The necessity for continuing price control of these essential drugs continued. That was an Act to provide for the control of sale, supply and distribution of drugs. Drug meant any drug as defined in clause (b) of Section 3 of Drugs Act, 1940, in respect of which a declaration had been made under Section 3 which defined drug. It may be noted that Pharmaco poeia authorised for the purpose of Section 3(h) of the Drugs Act, 1940, were: The Indian Pharmacopoeia, the Pharma copoeia of the United States, the National formulary of the United States, the International Pharmacopoeia and the State Pharmacopoeia 144 of the Union of Soviet Socialist Republics, vide S.O. 701 Gazette of India, 1961, Pt. II, section 3(ii), p. 725. There was thus no Ayurvedic Pharmacopoeia prescribed for the purpose of that Act. Pharmacopoeia is a book containing the list of drugs with directions for use. The fact that no Ayurvedic Pharmacopoeia had been notified at the relevant time was because Ayurvedic preparations were not drugs for the pur pose of Drugs Act and, for that matter, of , at the relevant time. It could be for this reason that in the original Schedule the expression medicinal and toilet preparations 'not otherwise specified ' was used and Ayurvedic prepara tions of different categories were put under item 2. In the Schedule as amended by the 1962 Act, this expression contin ued in item 3, The same definition of 'drug ' also continued in the Drugs Act. From the Explanation I of the Schedule of the Act as substituted by Act 5 of 1964 also it is clear that patent or proprietary medicine means any medicinal preparation which is not specified in a monograph in a Pharmacopoeia, Formu lary or other publications notified in this behalf by the Central Government in the Official Gazette. To be a patent medicine one would be required to have a patent. A patented article means an article in respect of which a patent is in force. "Patent" means a patent granted under the Indian Patent and , and now the Patent Act, 1970. A patent medicine will, therefore, mean medicine in respect of which a patent is in force. "Proprie tary" means of a proprietor, that is, holding proprietary rights. Patent means a grant of some privilege, property, or authority, made by the Government or sovereign of a country to one or more individuals. A proprietor is one who has the legal right or exclusive title to anything. It is synonymous with owner. A person entitled to a trade mark or a design under the acts for the registration or patenting of trade mark or design is called a proprietor of the trade mark or design. Under the , "trade mark" means: "(i) in relation to Chapter X (other than section 81), a registered trade mark or a mark used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right as proprietor to use the mark; and (ii) in relation to the other provisions of this Act, a mark used or proposed to be used in relation to goods for the 145 purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right, either as proprietor or as registered user, to use the mark whether with or without any indica tion of the identity of that person, and includes a certification trade mark registered as such under the provisions of Chap. " As defined in section 2(a), registered proprietor in relation to a trade mark means a person for a time being entered in the register as proprietor of the trade mark. A registered trade mark means a trade mark which is actually on the register. By section 18 of the Finance (No. , the Schedule to the Act was further amended substituting the Explanation 1 by the following: "Explanation 1: "Patent or proprietary medi cines" means any medicinal preparation which bears either on itself or on its container or both a name which is not specified in a mono graph in a Pharmacopoeia, Formulary or other Publications notified in this behalf by the Central Government in the Official Gazette, or which is a brand name, that is a name or a registered trade mark under the Trade and Merchandise Mark Act, 1958 (43 of 1958), or any other mark such as a symbol, monogram, label, signature or invented words or any writing which is used m relation to that medicinal preparation for the purpose of indicating or so as to indicate a connection in the course of trade between as preparation and some person having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person. " This amendment of the Explanation came into force in June, 1962 with retrospective effect from 23rd April, 1962. The Director of Prohibition and Excise, for Maharashtra State, Bombay, thereafter issued the circular dated 31.5. 1962 (Ext. 44). It said that the patent or proprietary medicines as defined in clause (d) of section 3 of the Drugs Act of 1940 (23 of 1940) and falling under items No. 1 and No. 4 of the Act as substituted by the Amendment Act, 1961 were, prior to 23rd April, 1962, subject to levy of duty at 10 per cent ad 146 valorem by virtue of the Explanation I below the Schedule to the Act which has now been deleted from 23rd April, 1962. According to new definition of 'Patent and Proprietary Medicines ' as given in the new Explanation as amended by Finance (No. medicinal preparations containing alcohol, opium, Indian hemp or other narcotic drugs or narcotic falling under item 3(i), 3(iii) and 3(v) of the said Schedule, were with effect from 23rd April, 1962 liable to duty not under the said items but under item No. 1 or item No. 4 of the said Schedule at 10 per cent ad valorem, if such preparations are "patent or proprietary medicines" as defined in the Explanation. Excise duty on all 'patent or proprietary medicinal preparations ' (Alopathic, Ayurvedic, Unani and Homoeopathic preparations) containing alcohol, opium, Indian hemp or other narcotic drug or narcotic, which fall within the purview of the new definition of 'patent or proprietary medicines ' given in the Explanation, should therefore, be recovered at the rate of 10 per cent ad valo rem from the holders of the licences granted under the said Act and the rules thereunder in accordance with the instruc tions contained in their Circular No. DQ 64 31/61 dated 22nd July, 1961. A note received from the Government of India, explaining the scope of the new definition of 'patent or proprietary medicines ' was also enclosed along with the circular. It is in evidence in the instant case that two bottles containing Asavas were produced in the Court as Exhibit 42/1 and Exhibit 42/2. Both the bottles contained the same kind of Asavas. The ingredients of the two were the same and the preparation of the two was also the same. When the Asavas were sold during the period beginning from June, 1962 to February, 1964, no excise duty was levied because on the label there was no trade mark of patent and proprietary right printed. If the Asavas were sold in the bottle having a label with no trade mark as at Exhibit 42/1, no duty was recovered from the plaintiff. These Asavas were supplied to Employees ' State Insurance as per their tender without the trade mark on the label to see that the plaintiffcompany were not taxed the excise duty which would have been charged had they put the patent mark on the label. But in order to fight for blemish of cheating, the plaintiff thought it necessary to have the trade mark on such bottles without any difference. As soon as the goods were sought to be sold in the above manner the excise duty was levied and was sought to be recovered from the plaintiff 's fund. No excise duty was recovered after February, 1964 even though Asavas were sold with their trade mark. It is also in evidence that there were two sub groups in the group of Asavas and Aris thas known as 'restricted ' and 'unrestricted '. Restricted means preparations which 147 could be used as alcoholic beverages. In this case the period from 26.7.62 to 29.2.64 is alone material inasmuch as by the Finance Act of 1964 with reference to item No. 1, the Ayurvedic and Unani medicines containing self generated alcohol and which were not capable of being consumed as ordinary alcoholic beverages were exempted from the levy of excise duty. In other words, the position prior to Finance Act of 1962 was continued and thereafter the medicinal preparations, namely, Asavas and Aristhas ceased to be taxed from 1964. It would be noted that the Explanation itself did not specifically mention "Allopathic, Ayurvedic, Unani and Homoeopathic preparations" as was done in the Director 's Circular. On a comparison of the earlier Explanation and the substituted Explanation one would notice that earlier "patent and proprietary medicines" meant a drug. In the substituted Explanation it means any medicinal preparation. However, it can not be lost sight of that the words "medici nal preparation" as continued to be defined in section 2(g) of the Act "includes all drugs which are a remedy or prescrip tion prepared for internal or external use of human beings or animals and all substances intended to be used for or in treatment, mitigation or prevention of diseases in human beings or animals. " We have already noticed that the Drugs Act continued to exclude Ayurvedic preparations till its amendment in 1964. It has been stated that even after amend ment of the Schedule after 1961 amendment the appellant 's product was exempted from duty, till the Director 's Circular disturbed the position. This brings us to the question of interpretation of the Act and the Schedule with the Explanation. in view of the submission that the Explanation could not have rendered item 3(i) of the Schedule redundant. Was there any change of intention of the Legislature in this regard? A Schedule in an Act of Parliament is a mere question of drafting. It is the legislative intent that is material. An Explanation to the Schedule amounts to an Explanation in the Act itself. As we read in Halsbury 's Laws of England, Third Edition, Vol. 36, para 551: "To simplify the presentation of statutes, it is the practice for their subject matter to be divided, where appropriate, between sections and schedules, the former setting out matters of principle, and introducing the latter, and the latter containing all matters of detail. This is purely a matter of arrangement, and a schedule is as much a part of the statute, and as much an enactment, as is the section by which it is introduced. " The schedule may be used in construing provisions in the 148 body of the Act. It is as much an act of Legislature as the Act itself and it must be read together with the Act for all purposes of construction. Expressions in the Schedule cannot control or prevail against the express enactment and in case of any inconsistency between the schedule and the enactment the enactment is to prevail and if any part of the schedule cannot be made to correspond it must yield to the Act. Lord Sterndale, in Inland Revenue Commissioners vs Gittus, said: "It seems to me there are two principles of rules of interpretation which ought to be applied to the combination of Act and Sched ule. If the Act says that the Schedule is to be used for a certain purpose and the heading of the part of the Schedule in question shows that it is prima facie at any rate devoted to that purpose, then you must read the Act and the Schedule as though the Schedule were operating for the purpose, and if you can satisfy the language of the section without extending it beyond that purpose you ought to do it. But if in spite of that you find in the language of the Schedule words and terms that go clearly outside that purpose, then you must give effect to them and you must not consider them as limited by the heading of that part of the Schedule or by the purpose mentioned in the Act for which the Schedule is prima facie to be used. You cannot refuse to give effect to clear words simply because prima facie they seem to be limited by the heading of the Schedule and the definition of the purpose of the Schedule contained in the Act. " The above observation was not disapproved in appeal However, the basic principle is that in case of a conflict between the body of the Act and the Schedule, the former prevails. In the instant case we do not find any such conflict. An Explanation, as was found in Bihta Marketing Union vs Bank of Bihar, ; , may only explain and may not expand or add to the scope of the original section. In State of Bombay vs United Motors, ; ,it was found that an Explana tion could introduce, a finction or settle a matter of controversy. Explanation may not be made to operate as "exception" or "proviso". The construction of an Explana tion, as was held in Collector of Customs vs G. Dass & Co., AIR 1966 SC 1577, must depend upon its terms and no theory of its purpose can be entertained 149 unless it is to be inferred from the language used. It was said in Burmah Shell Oil Ltd. vs Commercial Tax Officer, AIR 1961 SC 3 15: , that the explanation was meant to explain the Article and must be interpreted accord ing to its own tenor and it was an error to explain the Explanation with the aid of the Article to which it was annexed. We have to remember what was held in Dattatraya Govind Mahajan vs State of Maharashtra, ; (928): ; , that mere description of a certain provision, such as "Explanation" is not decisive of its true meaning. It is true that the orthodox function of an expla nation is to explain the meaning and effect of the main provision to which it is an explanation and to clear up any doubt or ambiguity in it, but ultimately it is the intention of the legislature which is paramount and mere use of a label cannot control or deflect such intention. State of Bombay vs United Motors, (supra) laid down that the inter pretation must obviously depend upon the words used therein, but this must be borne in mind that when the provision is capable of two interpretations, that should be adopted which fits the description. An explanation is different in nature from a proviso for a proviso excepts, excludes or restricts while an explanation explains or clarifies. Such explanation or clarification may be in respect of matters whose meaning is implicit and not explicit in the main section itself. In Hiralal Ratanlal vs State of U.P., ; (225), it was ruled that if on a true reading of an Explanation it appears that it has widened the scope of the main section, effect be given to legislative intent notwithstanding the fact that the Legislature named that provision as an Expla nation. In all these matters courts have to find out the true intention of the Legislature. In D.G. Mahajan vs State of Maharashtra, (supra) xx this Court said that legislature has different ways of expressing itself and in the last analysis the words used alone are repository of legislative intent and that if necessary an Explanation must be con strued according to its plain language and 'not on any a priori consideration '. Applying the above principles we do not find any differ ence between the Schedule and the Explanation I; the latter has not amended the Schedule by either deleting item 3(i) or by adding or including Ayurvedic preparations in item 1. No change of legislative intent is indicated. In the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 Section C Medicinal and Toilet preparations, Allopathic preparations, Homoeopathic preparations and Ayurvedic preparations are dealt with separately. So far as Ayurvedic preparations are concerned, 150 Rule 64 dealing with types of preparations said: "Asavas and Aristhas are the principal types of Ayurvedic preparations in which alcoholic content is self generated and not added as such. " Rule 65 on Pharmacopoeia for Ayurvedic prepara tions said: "Until a standard Ayurvedic pharmacopoeia has been evolved by the Central Government, the pharmacopoeias that are in vogue in the various States shall be recognised as standard Ayurvedic pharmacopoeias." Rule 66 classified the preparations containing self generated alcohol for purposes of levy of duty. It said: "No duty shall be levied on Ayurvedic preparations containing self generated alcohol in which the alcohol content does not exceed 2 per cent. Where the percentage of proof spirit is in excess of 2 per cent, duty will be leviable under item 2(ii) or 2(i) of the Schedule to Act the according as the preparations are capa ble of being consumed as ordinary alcoholic beverage or not." Thus Ayurvedic preparations containing self generated alcohol which are not capable of being used as alcoholic beverages fall under original 2(i) and now 3(i). The above Rules, which have not been shown to have been amended clearly say that where the percentage of proof spirit is in excess of 2% the preparation would be dutiable under item 2 which became item No. 3 in the amended Sched ule. This Rule is consistent with the Schedule but is wholly inconsistent with the Director 's circular. Mr. Ganguli relies on ; Baidyanath Ayurved Bhawan Pvt. Ltd. vs The Excise Commis sioner of U.P., The question there was whether medicinal preparation containing tincture, spirit etc. was dutiable. The tincture and spirit in their turn contained alcohol. It was contended that alcohol was not directly added but was component of the tincture or spirit. It was, however conced ed that the preparations were medicinal preparations and that tincture was a component of that preparation and alco hol was a component of tincture. Therefore, this Court held that it was difficult to see how it could be urged that the preparation did not contain alcohol. All that the plain language of the provision required was that the preparation should contain alcohol. The question whether Ayurvedic preparation was a drug to be included in the definition of medicinal preparation was not involved. Whether self gener ated alcohol was to be treated differently was also not there. In Mohanlal Maganlal Bhavsar vs Union of India. it was held that before a medicinal preparation can fall under Item 151 1 of the Schedule three conditions are required to be satis fied: (A) the preparation must be a patent or proprietary medicine; (2) it must contain alcohol; and (3) it must not be capable of being consumed as an ordinary alcoholic bever age. The fact that ointments and liniments were medicinal preparations containing alcohol in semi liquid form did not make any difference. However it was not in dispute that the articles were medicinal preparations for the purposes of the Act and that they were patent and proprietary medicines. In the instant case the question is whether Ayurvedic prepara tions, in view of the definition of medicinal preparations in the Act, could be regarded as drugs and could be dutiable under Item 3 and not Item 1. In Commissioner of Sales Tax vs The Modi Sugar Mills Ltd.; , it was held that a taxing statute must be interpreted in the light of what is clearly expressed therein and nothing can be implied nor can provisions be imported into them so as to supply an assumed deficiency. In Baidyanath Ayurved Bhawan (supra) this Court quoted the observation of Rowlatt, J. in Cape Brandy Syndi cate vs Commissioners of Inland Revenue, that "in a taxing Act one has to look at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. " The question in the instant case, however, is whether the appellant 's product being an Ayurvedic preparation could be a drug for being included in the definition of medicinal preparation for the purpose of the Act. This question was not raised in the above cases. As Mr. Dholakia points out, the Circular would render item 3(i) of the Schedule wholly redundant. It has been the consistent policy of legislature to exempt item 3(i) hither to 2(i), from duty. The legislature has not in any way changed it. The Explanation has not in any way altered the classification in the Schedule. The substituted Explanation no doubt stressed on patents and trade marks. But it has not expressly envisaged in item I, patented trade marked Ayurvedic preparations contrary to the classification in the Schedule. Ex praecedentibus et consequentibus optima fit interpretatio. The best interpretation is made from the context. Injustum est nisi tota lege inspecta, de una aliqua ejus particula proposita judicare Vel respondere. It is unjust to decide or respond as to any particular part of a law without examining the whole of the law. Interpretare et concordare leges legibus, est optimus interpretendi modus. To interpret and in such a way as to harmonize laws with laws, is the best mode of interpretation. In the instant case the Director 's Circular is not in harmony with item 3(i) or with the classifi 152 cation of Ayurvedic preparations in separate item 3. It would not be in conformity with definition of medicinal preparation ' in section 2(g) of the Act. Jura eodern modo dislit uentur quo constitutuntur. Laws are abrogated by the same means (authority) by which they are made. The Director 's Circular is not shown to have been a piece of delegated legislation. The Explanation on its tenor does not amend the Schedule. No part of a Statute is to be taken as superfluous or redundant. Every word in a Statute is to be given a meaning. A construction which would leave without effect any part of the language of a statute will normally be rejected. Every clause of a statute is to be construed with reference to the context and other clauses of the Act so as to make, as far as possible, a consistent enactment of the whole Statute. The High Court accepted the submission that it provided a selfcontained definition of 'patent and proprietary medi cines ' for the purpose of the main Act and severed the connection between the provisions of the Drugs Act as was contemplated in earlier Explanation I, and consequently one need not look to the Drugs Act at all for its interpretation and the Schedule was thence to be interpreted as it existed along with that self containing definition in Explanation I. In doing so, the position that "Patent and Proprietary medicines" means "any medicinal preparation" which very "Medicinal preparation" includes all drugs which are a remedy or prescription etc. as defined in section 2(g) of the Act. So a reference to the Drugs Act was still necessary. No doubt this is an inclusive definition. To enlarge its deno tation a specific provision to include Ayurvedic prepara tions containing selfgenerated alcohol which are not capable of being consumed as ordinary alcoholic beverages was neces sary. That having not been done by the Explanation itself, it was not permissible to include it by the Circular. The Explanation I could not have been in conflict with the provisions of the Act and the Circular could not have been in conflict with the Explanation, the Schedule, the Rules and the Act. In the result, we set aside the judgment and decree of the High Court and restore those of the Civil Judge decree ing the suit. We leave the parties to bear their own costs. Y. Lal Appeal allowed.

The appellant is a company having its registered office at Ahmednagar in Maharashtra. It carries on business as manufacturers of Ayurvedic preparations including "Asvas" and "Aristhas". At the material time the appellant was manufacturing and selling an Ayurvedic product, "Ashvagand harist" which is a medicinal preparation containing self generated alcohol but not capable of being consumed as ordinary alcoholic beverages. came into force on 1.4.1957. The schedule to the said Act contained two items specifying "medicinal and toilet preparations containing alcohol" which are prepared by distillation or to which alcohol has been added and which are capable of being consumed as ordinary "alcoholic bever age" and "medicinal and toilet preparations not otherwise specified containing alcohol" as the commodities excisable under the provisions of the Act. The said "Ashvagandharist" was treated and accepted by the Excise Authorities as being exempt from the payment of excise duty upon the basis and footing that the same was an Ayurvedic preparation contain ing self generated alcohol which was not capable of being consumed as ordinary alcoholic beverage and which fell under item 2(i) of the schedule in respect of which, the rate of excise duty prescribed in the schedule was "Nil". 130 The Act was amended by Amendment Act 19 of 1961 whereby concept of "patent and proprietary" medicine was introduced in the schedule. The Amendment Act, by an Explanation intro duced in the schedule the definition of "patent and proprie tary" medicine contained in the Drugs Act 1940. Despite the said amendment in the schedule the appellants ' product continued to be treated as exempt from the liability to pay excise duty on the ground that it was covered under item 2(i) of the schedule which item was re numbered as item 3(i) of the schedule. Thereafter by section 18 of the Finance Act 1962, the Act was further amended by substitution of Expla nation I to the schedule of the Act. By the said explana tion, a "patent and proprietary" medicine was defined as a medicinal preparation of the description and the type speci fied in the Explanation. The said Explanation was given retrospective effect from April 23, 1962. In pursuance of the said Explanation I brought by the Finance Act, Director of Prohibition and Central Excise, Govt. of Maharashtra, Bombay issued a circular dated May 31, 1962, which inter alia directed that the medicinal preparations containing self generated alcohol but not capable of being consumed as alcoholic beverage were to be treated as products falling under Item No. I and not Item 3 of the schedule. As a result of that circular, the Respondents levied excise duty on the appellants ' product amounting to Rs.2, 18,282.16p. and realized the same from the appellant. The appellant paid the amount "under protest". With a view to recover the aforesaid amount, which according to the appellant, was illegally recovered by the Respondents, the appellant filed a suit, being special suit No. 23 of 1965 in the Court of Civil Judge Sr. Division, Ahmednagar. The Civil Judge by his order dated 27.3.69 decreed the appellantplaintiff 's suit with interest at 6% per annum from the date of the suit till realisation. The Respondents appealed to the High Court against the Order of the Civil Judge and the High Court allowed the appeal, reversed the Judgment and decree passed by the Civil Judge and dismissed the appellant 's suit. Hence this appeal by the plaintiff appellant by special leave. Allowing the appeal, this Court, HELD: From Explanation I of the Schedule of the Act as substituted by Act 5 of 1964 it is clear that patent or proprietary medicine 131 means any medicinal preparation which is not specified in a monograph in a Pharmacopoeia, Formulary or other publica tions notified in this behalf by the Central Government in the Official Gazette. [144C] To be a patent medicine one would be required to have a patent. A patented article means an article in respect of which a patent is in force, [144D] A patent medicine will, therefore, mean medicine in respect of which a patent is in force. [144E] Patent means a grant of some privilege property, or authority, made by the Government or sovereign of a country to one or more individuals. A proprietor is one who has the legal right or exclusive title to anything. It is synonymous with owner. A person entitled to a trade mark or a design under the Acts for the registration or patenting of trade mark or design is called a proprietor of the trade mark or design. [144E F] A Schedule in an Act of Parliament is a mere question of drafting. It is the legislative intent that is material. An Explanation to the Schedule amounts to an Explanation in the Act itself. [147F] The Schedule may be used in construing provisions in the body of the Act. It is as much an Act of the Legislature as the Act itself and it must be read together with the Act for all purposes of construction. Expressions in the Schedule cannot control or prevail against express enactment and in case of any inconsistency between the schedule and the enactment, the enactment is to prevail and if any part of the schedule cannot be made to correspond it must yield to the Act. [147H; 148A B] An explanation is different in nature form a proviso, for a proviso excepts, excludes or restricts while an expla nation explains or clarifies. Such explanation or clarifica tion may be in respect of matters whose meaning is implicit and not explicit in the main section itself. [149F] Bihta Marketing Union vs Bank of Bihar, ; ; ; State of Bombay vs United Motors, ; ; Collector of Customs vs G. Dass & Co., AIR 1966 SC 1577; Burmah Shell Oil Ltd. vs Commercial Tax Officer, AIR 1961 SC 315: ; Dattatraya Govind Mahajan vs State of Maharashtra, ; (928): ; and Hiralal 132 Ratanlal vs State of U. P., ; Ex praecedentibus et consequentibus optima fit interpre tatio. The best interpretation is made from the context. Injustum est nisi tota lege inspecta, de una aliqua ejus particula proposita judicare Vel respondere. It is unjust to decide or respond as to any particular part of a law without examining the whole of the law. Interpretare et concordare leges ligibus, est optimus interpretendi modus. To interpret and in such a way as to harmonize laws with laws, is the best mode of interpretation. [151G H] Jura eodem modo distituentur quo constitutuntur. Laws are abrogated by the same means (authority) by which they are made. [152A] Every word in a Statute is to be given a meaning. A construction which would leave without effect any part of the language of a statute will normally be rejected. Every clause of a statute is to be construed with reference to the context and other clauses of the Act so as to make, as far as possible, a consistent enactment of the whole statute. [152B] A specific provision to include Ayurvedic preparations containing self generated alcohol which are not capable of being consumed as ordinary alcoholic beverages was neces sary. That having not been done by the Explanation itself, it was not permissible to include it by the Circular. The Explanation I could not have been in conflict with the provisions of the Act and the Circular could not have been in conflict with the Explanation, the Schedule, the Rules and the Act. [152E F] The Court set aside the order of the High Court and restored that of the Civil Judge decreeing the suit. [152G] Inland Revenue Commissioners vs Gittus, [1920] I KB 563; Baidyanath Ayurved Bhawan Pvt. Ltd. vs The Excise Commis sioner, U.P.; , ; Mohanlal Maganlal Bhavsar vs Union of India, ; Commissioner of Sales Tax vs The Modi Sugar Mills Ltd., ; and Cape Brandy Syndicate vs Commissioners of Inland Revenue, , referred to.

ivil Appeal No 3740 of 1988. From the Judgment and Order dated 7.7.1988 of the Patna High Court in C.R. No. 167 of 1988. Dr. Shankar Ghosh and D P Mukherjee for the Appeliant. H.K.Puri for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. Special leave granted. The appeal is disposed of by the judgment herein. This is an appeal from the judgment and order of the High Court of Patna (Ranchi Bench) dated 7th of. July, 1988 By the aforesaid order the High Court confirmed the striking off of the defence of the. appellant in a suit for eviction under the Bihar Building (Lease, Rent and Eviction) Control Act, 1982 (hereinafter called `the Act ') on the ground of personal necessity and change of the nature of the business by the appellant etc. The plaintiff respondent filed a suit for eviction against the defendant appellant from the shop room under Section 11 of the said Act on the aforesaid grounds The appellant tiled the written statement contesting the said suit. The case Or the appellant was that the PG NO 411 respondent landlord 's case was false and a pretext for reletting the premises for much higher rent after her attempt to increase rent did not succeed. It was further alleged that the landlord had sufficient alternative accommodation which would not entitle him to get a decree. It was denied that there was no change of business carried on apart from those business permitted by the contract of tenancy. There was, however, no such bar in this case. On 4th of February, 1983, the asked for an order under Section 15 of the said Act against the appellant for deposit of arrears and current rent. The Trial Court by its order on that date directed the appellant to deposit the arrears, if ny, and continue to deposit rent month by month in future by 15th day of the month next following. It was stated that the appellant accordingly got challans passed for 2 months together each time and deposited the amount in time in the court treasury throughout. However, through some inadvertence, rent for the months of November and December, 1986 could not be deposited. It as alleged that the appellant had genuine belief that his son had deposited the same. It was further the case of the appellant that neither the landlord nor any court of law ever pointed out this non deposit to the appellant. The appellant further asserted that the challans for subsequent period having been passed without any objection, the appellant got the impression which was bona fide that he had complied with the earlier order of the court and continued to be in bona fide occupation of the premises in question. In the premises, the respondent filed a petition under section 15 of the Act in the trial court for a direction to strike out the defence on the ground that the appellant failed to deposit rent for the months of November and December, 1986. The appellant contested the application, inter alia, contending that the rent for the said period had been duly deposited and asked for a report from the Accounts Branch of the court. This, according to the appellant, was because the challan for that period was found missing from the record of the appellant as asserted by the appellant. It later transpired on the challans being produced that the rent for the months of November and December, 1986 had not been actually deposited. The appellant 's case was and throughout has been that this was a mistake. The appellant, therefore, got a fresh challan passed on or about 9th March, l988 and deposited the amount. It is further the case of the appellant that all subsequent amounts have been duly deposited for all subsequent periods. The respondent made his application, as mentioned hereinbefore, under section 15 of the Act for striking out the defence. On 27th March, 1988, the learned Subordinate Judge III, Jamshedpur found that the rent for the months of November and December, 1986 had not been deposited. The defence against the ejectment, therefore, was struck off. It PG NO 412 was contended before the learned Subordinate Judge that the time to deposit the rent from time to time, though originally granted for two months had expired, could be extended. On the other hand, on behalf of the respondent, it was urged that the defence was bound to be struck off since it was apparent that the amount had not been deposited. It was asserted that the defence of the appellant that the amount had been deposited, and the assertion to which the appellant struck was obstinate and wrong and, therefore, not bona fide. Taking view of these evidence, the learned Subordinate Judge came to the conclusion that the excuse for non deposit was not bona fide and there was unexplained delay to deposit the rent for the months of November and December, 1986 as enjoined by the order of the court, and, therefore, under section 15 of the Act, it was obligatory for the court to strike off the defence. The High Court was moved in revision. The High Court dismissed the application on the 7th July, 1988 in limine. Hence, this appeal. Section 13 of the Act enjoins making of an application for deposit by a tenant in suits for ejectment. The said section provides as follows: " 13. Deposit of rent by tenants in suits for ejectment. If in a suit for recovery of possession of any building the tenant contests the suit, as regards claim for ejectment, the landlord may make an application at any stage of the suit for order on the tenant to deposit month by month rent at a rate at which it was last paid and also the arrears of rent, if any, and the Court, after giving an opportunity to the parties to be heard, may make order for deposit of rent at such rate as may be determined month by month and the arrears of rent, if any, and on failure of the tenant to deposit the arrears of rent within fifteen days of the date of the order or the rent at such rate for any month in the fifteenth day of the next following months, the Court shall order the defence against ejectment to be struck out and the tenant to be placed in the same position as if he had not defended the claim to ejectment. The landlord may also apply for permission to withdraw the deposit rent without prejudice to his right to claim decree for ejectment and the Court may permit him to do so. The Court may further order recovery of cost of suit and such other compensation as may be determined by it from the tenant. " PG NO 413 In case an order of a deposit is made, the court may pass an order to deposit the rent on a particular date and/or on 15th day of the following month and if such a deposit is not made then the court shall order the defence against the ejectment to be struck out and the tenant be placed in the same position as he had not defended the claim for ejectment. The question is if the deposit is not made, the provision of the section mandates the court to strike out the defence. The question, therefore, arises whether there is any discretion for the court in case the deposit is not made within the stipulated time. Indisputably, in this case the deposit had not been made. The section is clear in its terms. The Act, as the preamble states, is inter alia `to prevent unreasonable eviction of tenants '. Therefore, though it is for protection of tenants, the Act is enjoined to regulate the rights and the duties of the landlords and the tenants. In the facts of this case, as found by the court, there was failure to deposit the rent within the stipulated time. The actual problem in the instant case is whether in a case of a genuine mistake, which, we must hold there was in this case does the court have jurisdiction to extend the time and treat the deposit subsequently made as properly made? In Ganesh Prasad Sah Kesari & Anr. vs Lakshmi Narayan Gupta, ; this Court was concerned with the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 and Section 11A thereof as it stood at the relevant time. The said section, like the present section 13, enjoins that `the court shall order the defence against ejectment to be struck out and the tenant be placed in the same position as if he had not defended the claim to ejectment '. This Court held that failure to comply with an earlier direction should not necessarily visit the tenant with the consequences of his defence being struck off because there might be myriad situations in which default may be commited. The Court should, therefore, adopt such a construction as would not render the court powerless in a situation in which the ends of justice demand relief being granted. It was found in that case that the tenant had deposited all arrears of rent though there were some irregularities in making the deposit, but it was not of such a nature as to visit the tenant with the consequence of striking off his defence. In that case, it was held that the defence should not be struck off and the Court should also not consider the word `shall ' in the context of the section as mandatory but directory. In the cue of Mrs. Manju Choudhary and Anr. vs Dulal Kumar Chandra, it was held that if there was `unexplained delay then the court is bound to strike off the defence. There was observation that there is a duty cast PG NO 414 on the court to strike off the defence if there is failure to deposit the rent in terms of the order of section 13 of the Act. The said observations would apply to the facts of this case and, therefore, the court must from a proper perspective judge the question whether the delay or failure to deposit the rent in terms of order under section 13 of the Act has been properly explained and if that delay has been properly explained, then the court has a discretion to excuse the delay, but if the delay has not been properly explained then the court has no discretion. In our opinion, such a construction would be a harmonious rendering of the language of section 13 to the claim for justice in each particular case. Therefore, the court should consider whether the delay has been reasonably explained or not. In construing that question the court in the scheme of the administration of justice must take a constructive and purposeoriented approach. If it does, then the element of discretion comes into play though not in the form of directory or mandatory provision but in considering whether the delay was properly explained or not. In the facts of this case. we find that there is good deal of justification for the delay and the delay has been properly explained in the background of the facts and the circumstances of the case. If that is the position, the court should consider the question in that light. The trial court did not look at it from that perspective. The court, therfore, committed an error resulting in miscarriage of justice. The High Court in not interfering with this miscarriage of justice too committed an error of jurisdiction. In this connection, reference may be made to the observations of this Court in M/s B.P.Khemka Pvt. Ltd. vs Birendra Kumar Bhowmick and Anr., [I971] 2 SCC 407. There, the court was concerned With the default in payment under the West Bengal Premises Tenancy Act, 1956 (as introduced by Ordinance 6 of 1967).There, the court had to consider the expresion `shall ' in section 17(3) of the West Bengal Act. It was held that the court 's power was discretionary and in that case the High Court was of the opinion that the delay of two months in payment of rent being of technical nature, the court should have exercised discretion and refused to strike off the defence. It was the view of the court that the words `shall order the defence against delivery of possession to be struck out ' occuring in section 17(3) of the West Bengal Act have to be construed as directory provision and not mandatory provision as the word `shall ' should b. read as `may '. The court expressed the view that such a construction was warranted because otherwise the intendment of the Iegislation as judged from the whole scheme in the preamble would be defeated and the class of PG NO 415 tenants for whom the beneficial provisions were made by the Ordinance in question in that case and the amending Act will stand deprived of them. This Court observed that the court is vested with the discretion either to order the defence to be struck out or not, depending upon the circumstances of the case in the interest of justice. There, the Court found that the delay was technical in nature. Therefore, the interest of justice which is the paramount justification of the administration of justice with the purpose of the Act, compels us to hold that if the delay is explained then there is no delay and the court in such a case cannot strike off the defence. If, on the other hand, the delay is not explained or the explanation is one which is not acceptable to the court, then the court must strike out the defence and there is no discretion. Read in that light, in our opinion, the learned trial judge of the High Court committed an error in exercising his jurisdiction. The orders of the High Court and the Trial Court are set aside. The defence of the appellant is restored since all the rents have been deposited. In view of the delay due to interruption in the prosecution of the case, it is desirable, if possible, to dispose of the trial within six months from today, particularly since the case has been pending since 1975. The appeal is, therefore, disposed of accordingly. In the facts and the circumstances of the case and the conduct of the appellant in taking an incorrect defence leading to subsequent proceedings, the appellant is directed to pay all costs of this appeal which are assessed as Rs. 1,500. R.S.S. Appeal disposed of.

During the pendency of the suit for eviction of the defendant appellant from the shop room under section 11 of the Bihar Building (Lease, Rent and Eviction) Control Act, 1982 the Trial Court passed an order directing the appellant to deposit rent month by month. The appellant having defaulted in the payment of rent for two months, the respondent landlord filed a petition under section 13 of the Act for a direction to strike out the defence of the appellant. The appellant 's defence was that it was a case of genuine mistake. The Trial Court held that the excuse for non payment was not bona fide and that there was unexplained delay to deposit the rent. The Trial Court therefore struck off the appellant s defence. The High Court dismissed the revision application of the appellant it limine. Disposing of the appeal, it was, HELD: (1) The Act, as the preamble states, is inter alia `to prevent unreasonable eviction of tenants '. Therefore, though it is for protection of tenants, the Act is enjoined to regulate the rights and the duties of the landlords and the tenants. [413C] (2) The Court must from a proper perspective judge the question whether the delay or failure to deposit the rent in terms of order under section 13 of the Act has been properly explained, and if that delay has been properly explained, then the court has a discretion to excuse the delay, but if the delay has not been properly explained then the court has no discretion. Such a construction would be a harmonious rendering of the language of section l 3 to the claim for justice in each particular case. [414B C] PG NO 409 (3) In construing the question whether the delay has been reasonably explained or not, the court in the scheme of the administration of justice must take a constructive and purpose oriented approach. If it does, then the element of discretion comes into play though not in the form of directory or mandatory provision but in considering whether the delay was properly explained or not. [414C D] (4) In the facts of this case, there is good deal of justification for the delay and the delay has been properly explained. The Trial Court, therefore, committed an error resulting in miscarriage of justice. The High Court in not interfering with this miscarriage too committed an error of jurisdiction. [4l4D E] Ganesh Prasad Sah Kesari vs Lakshmi Narayan Gupta, [1985] 3S.C.R. 825; Mrs. Manju Choudhary vs Dulai Kumar Chandra, and M/s. B.P. Khemka Pvt. Ltd. vs Birendra Kumar Bhowmick; , , referred to.

ivil Appeal Nos. 2034 2036 of 1974. From the Judgment and Order dated 1.10.1973 of the Gujarat High Court in Wealth Tax Reference No. 16 of 1971. Dr. Gauri Shankar, Miss A. Subhashini for the Appellant. Harish Salve and Mrs. A.K. Verma for the Respondent. The following Judgments of the Court were delivered: PATHAK, CJ. These appeals by certificate granted by the Gujarat High Court are directed against the judgment of the High Court disposing of three wealth tax References. The three trust deeds were executed by Narottam Lalbhai for the benefit of the assessee, his wife and his children and grand children The deed dated March 19. 1955 created a trust known as the Arvind Narottam Trust. The deed dated April 9, 1955 created a trust called the Arvind Family Trust. And the deed dated March 18, 1961 created a trust described as the Arvind Kalyan Trust. All the three trust deeds are couched in identical terms, except in regard to the minimum amounts payable to the beneficiaries out of the income of each year. There was one further difference in detail. The first two deeds. specified a period of 18 years from the date of execution as the period during which the net income could be distributed to the assessee. his wife and children, while the third specified a period of 30 years. The minimum annual payments to be made under the three trust deeds to the assessee by way of maintenance were Rs. 250, Rs. 150 and Rs.250 respectively. Under each of the trust deeds the settlor specified the interest of the beneficiaries in the trusts. The pertinent terms of one of them, the Arvind Narottam Trust Deed. may be set forth here. Clauses 7 and 8 of that Trust Deed provide: "7(a) Whatever income by way of interest or otherwise is received each year by the trustees from the trust fund should be first applied in meeting with the expenses of the PG NO 269 management of the trust and the payment of taxes thereof. For a period of 18 years hereafter, the trustees may pay to Arvind or if Arvind gets married during the period to Arvind, his wife and children or to one or more of these persons, such portion of the net income remaining thereafter as the trustees deem fit. However, the trustees shall pay to Arvind, or if Arvind gets married during the period to each Arvind and his wife, at least Rs.150 every year. After such distribution, if there remains any surplus from the income of any year, it shall be added to the corpus of the fund. if in any year the net income accuring to the fund is less than Rs.300 the whole amount should be paid to Arvind and if Arvind gets married during the period to Arvind and his wife in equal shares. If Arvind expires during the period of 18 years hereafter or if Arvind gets married during the period and both Arvind and his wife expire, the whole of the net income of the trust fund should be added to the corpus for a period of 18 years hereafter. (b) Whatever may be the corpus and the accumulated balance remaining undistributed out of the income of each year, shall be paid (as capital) at the end of 18 years hereafter to Arvind, his wife and his children or survivor or such of them in such proportion as the trustees deem fit. If the trustees are not able to decide Upon the persons to whom or the proportion in which the said corpus and accumulated balance of income is to be distributed or it is not possible legally to give effect to the decision of trustees or it is illegal to do so, then the proportion in which the distribution will be made will be an equal share for each of the persons or survivors comprising of Arvind, his wife and his children. If none of the said persons are alive at the time of distribution then the distribution will be made to Niranjan. his wife and children or survivors. all or such of them and in such proportion as the trustees deem fit. If none of the said persons are alive at the time of distribution then the corpus and the balance of income will be given over by the trustees on such conditions as they deem fit as donation to the Gujarat University or any other educational institution or an institution giving medical aid or attending to, the health of public in general. PG NO 270 8. If the trustees so think fit the trustees are hereby 74 to distribute as capital even before the expiry of 18 years whatever property and income is at the particular time accumulated in the trust fund to Arvind, his wife and his children or survivor or such of them in such proportion as the trustees deem fit. If the trustees are not able to decide upon the persons to whom or the proportion in which the said corpus and accumulated balance of income is to be distributed or it is not possible legally to give effect to the decision of trustees or it is illegal to do so, then the proportion in which the distribution will be made will be an equal share for each of the persons or survivors comprising of Arvind, his wife and his children. If none of the said persons are alive, at the time of distribution then the distribution will be made to Niranjan, his wife and his children or survivors, all or such of them and in such proportion as the trustees deem fit. If none of the said persons are alive at the time of distribution, then the corpus and the balance of income will be given over by the trustees on such conditions as they deem fit as donation to the Gujarat University or any other educational institution or an institution giving medical aid or attending to the health of public in general. But if Arvind and his wife are the trustees at that time then they have no right to give vote in the above matter. But if the other trustees unanimously agree to allow them to vote then they can. " The Wealth Tax Officer made assessment orders for the assessment years 1963 63, 1963 64 and 1964 65 under the Wealth Tax Act, the relevant valuation dates being December 31, 1961, December 31, 1962 and December 31, 1963. He assessed the assessee under sub section (2) of section 21 of the Wealth Tax Act on the entire value of the assets held by the trusts. On appeal the Appellate Assistant Commissioner confined the liability of the assessee to wealth tax on the capitalised value of the minimum amounts payable under the trust deeds for his maintenance. that is to say say Rs.250, Rs.150 and Rs.250 respectively per year. The Appellate Tribunal, on second appeal, affirmed the view taken by the Appellate Assistant Commissioner. At the instance of the Revenue. the three cases were carried in reference to the High Court for its opinion in each case on the following question,n of law: "Whether, on the facts and in the circumstances of the case, the finding that it is only the capitalised value of the interest of the assessee that has to be included in the net wealth of the assessee is in law justified?" PG NO 271 The High Court answered the question in each case in the affirmative, in favour of the assessee and against the Revenue. And now these appeals. Admittedly, on all relevant dates of these assessment years, the assessee was a bachelor, and was alone entitled therefor to the benefit of the three trusts. It is accepted also that the trusts are discretionary trusts. The controversy between the parties arises on the application of section 21 of the Wealth Tax Act. Section 21, as it stood at the relevant time provided: "section 21. Assessment when assets are held by courts of wards, administrators general, etc. (1) In the case of assets chargeable to tax under this Act, which are held by a court of wards or an administrator general or an official trustee or any receiver or manager or any other person, by whatever name called, appointed under any order of a court to manage property on behalf of another, or any trustee appointed under a trust declared by a duly executed instrument in writing, whether testamentary or otherwise (including a trustee under a valid deed of wakf), the wealth tax shall be levied upon and recoverable from the court of wards, administrator genera1, official trustee, receiver, manager or trustee, as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from the person on whose behalf (or for whose benefit) the assets are held, and the provisions of this Act shall apply accordingly. (2) Nothing contained in sub section (1) shall prevent either the direct assessment of the person on whose behalf (or for whose benefit) the assets above referred to are held. or the recovery from such person of the tax payable in respect of such assets. (3) xx xx xx xx (4) Notwithstanding anything contained in (the foregoing provisions of) this section, where the shares of the persons on whose behalf or for whose benefit any such assets are PG NO 272 held are indeterminate or unKnown, the wealthtax shall be levied upon and recovered from the court of wards, administrator genera1, official trustee, receiver, manager, or other person aforesaid, (as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from an individual who is a citizen of India and resident in India) for the purpose of this Act. The contention of Dr. V. Gauri Shankar on behalf of the Revenue is that the settlor had specifically made these three trusts for the benefit of his son, Arvind, the assesee, and has declared unequivocally that the settlement is for the benefit of the assessee, and on the asses see 's marriage, also for the benefit of his wife and children. It is urged that the High Court has erred in failing to collect the real intention of the settlor from the entire document and has erroneously confined itself to paragraph 7 of the deed. According to learned counsel, what the High Court should have done was to ascertain the state of affairs existing on the relevant valuation date. It should not have been influenced by what could possibly happen in the indefinite future on the happening of certain contingencies. The submission is that on the valuation dates there was only one beneficiary, the assessee, his share was determined and known, and it extended to the entire interest in the trust properties. It is urged that in the case of a discretionary trust the interest of the beneficiary extends not only to the actual share paid to him but to his right to be considered as a potential recipient of the net income remaining after defraying the managment expenses and paying the taxes. It extends, he says, to an interest in the Trust accumulation both before or after the expiry of the stipulated period when the Trustees are empowered to distribute the accumulated balance as capital. Learned counsel urges that the whole deed of settlement in each case should be read and understood comprehensively and only thereupon can a true answer be returned to the question framed in the reference. Considerable emphasis has been on the submission that the capital value of the contingent intereset in the entire property must be kept in view. I have no difficulty in accepting the submission of Dr. Gauri Shankar that for a proper understanding of a case before us we must consider the entire deed of settlement. That, however, does not lead to the conclusion which learned counsel wishes us to accept. What is the interest of the assessee under the deed of settlement on the relevant valuation date? We are concerned with the capital value of that interest. It is apparent that the assessee was entitled only to the minimum prescribed in each of the deeds of settlement. Whether or not be received any further amount PG NO 273 out of the net income of the Trust Fund was left entirely in the discretion of the Trustees. There was no right in the assessee to any portion of the net income in excess of the minimum guaranteed to him. It is the minimum alone which he could claim as his property. So also, on the distribution of the accumulated balance as capital at the end of the stipulated period there was no right in him to receive any part thereof. It was open to the Trustees to ignore him altogether and they could pay it to such other members of the family as they chose. In support of the proposition that the expression 'property ' is a term of the widest amplitude and that every possible interest is includible therein we are referred to Ahmed G.H. Ariff 'and Others vs Commissioner of Wealth Tax, Calcutta, I have no doubt that the expression 'property ' must bear a comprehensive import. The question remains whether what is conveyed under the three deeds of settlement to the assessee is a right to anything more than the prescribed minimum under each deed. I may reiterate that the interest extends to no more than that minimum. It is contended on behalf of the Revenue that the fact that a beneficiary may change on the happening of certain contingencies will not make the share of the beneficiary un determined or unknown. and reliance has been placed on Padmavati Jaykrishna Trust & Another vs Commissioner of Wealth Tax, Gujarat [l966] ; Commissioner of Wealth Tax, Bombay vs Trustees of Mrs. Hansbai Tribhuwandas Trust, [l968] ; Commissioner of Wealth Tax, A. P. vs Trustees of H.E.H. Nizam 's Family (Remainder Wealth) Trust. and Commissioner of Wealth Tax, A.P. vs Trustees of H.E.H. The Nizam 's Sahebzadi Anwar Begum Trust, These cases can be of no assistance to us, for, unlike the facts in each of those cases, the instant case is one where beyond the specified minimum the assessee was not entitled to anything more. There must be a right, present or contingent, before it can be said that an assessee has an interest, and I am supported in this by what was said by the House of Lords in Gartside & Anr. vs Inland Revenue Commissioners. LR 1968 Appeal Cases 553 where it was also observed that a mere right to be considered for distribution of the income or of the corpus of the Trust Fund cannot be regarded as an `interest ' since it was not capable of valuation. Dr. Gauri Shankar relies on Leedale (Inspector of Taxes) vs Lewis., [l982] 3 All E.R. 808. But the decision in that case turned on the principle language of the English Statute, where an approximation of the value is permitted by the "just and reasonable" clause and by the words "as near as may be" in section 42(2) of the Finance Act. PG NO 274 It is vehemently urged by Dr. Gauri Shankar that the approach to be adopted in this case is not that which finds favour under the Income tax law, and different considerations prevail under the Wealth Tax Act. As I am proceeding on the basis of the true construction of the Deeds of Settlement, I fail to see any substance in that contention. Reliance war also placed by learned counsel for the Revenue on McDowell and Co. Ltd. vs Commercial Tax Officer, That decision cannot advance the case of the Revenue because the language of the deeds of settlement is plain and admits of no ambiguity. In the result I endorse the view taken by the High Court and dismiss these appeals with costs. SABYASACHI MUKHARJI, J. I agree with the judgment of the learned Chief Justice. There is, however, one aspect of the matter on which some arguments were advanced at the time of hearing of this case, to which I would like to advert. Dr. V. Gauri Shankar appearing on behalf of the revenue made an appeal before us stating that we should really construe the three Trust Deeds together and see 'the game of the hidden purpose ' behind these Trust Deeds which were, in fact, for the sole and exclusive benefit of the assessee. He drew our attention to the observations of Justice Chinnappa Reddy, with which other learned Judges of the Full Bench agreed in McDowell & Co. Ltd. vs Commercial Tax Officer, He invited us to hold that having regard to the taxing Statute the tax avoidance device should be exposed. Justice Chinnappa Reddy has noticed the change in judicial attitude to the tax avoidance devices. Justice Reddy mentioned that in the country of its birth the principles of Westminister of condoning tax avoidance have been given a decent burial. In that very country the phrase 'taxavoidance ' is no longer condoned or looked upon with sympathy. It is true that tax avoidance in an under developed developing economy should not be encouraged on practical as well as ideological grounds. One would wish, as noted by Reddy, J. that one could get the enthusiasm of Justice Holmes that taxes are the price of civilization and one would like to pay that price to buy civilization. But the question which many ordinary tax payers very often in a country of shortages with ostentious consumption and PG NO 275 deprivation for the large masses ask, is does he with taxes buy civilization or does he facilitate the wastes and ostentiousness of the few. Unless wastes and ostentiousness in Government 's spendings are avoided or eschewed, no amount of moral sermons would change people 's attitude to tax avoidance. In any event, however, where the true effect on the construction of the Deeds is clear, as in this case, the appeal to discourage tax avoidance is not a relevant consideration. But since it was made it has to be noted and rejected. With these observations I agree. H.L.C. Appeals dismissed.

The respondent who was entitled to minimum annual payments of specified amounts under the three trust deeds in question was assessed to tax under sub section (2) of section 21 of the Wealth Tax Act, on the entire value of the assets held by the trusts. On appeal, the Appellate Assistant Commissioner confined the liability of the assessee to wealth tax on the capitalised value of the minimum amounts payable under the trust deeds, and his decision was affirmed, on second appeal, by the Appellate Tribunal. At the instance of the Revenue, the opinion of the High Court was sought on the question whether the finding that it was only the capitalised value of the interest of the assessee that had to be included in the net wealth of the assessee was 5justified. The High Court answered the question in the affirmative, in favour of the assessee and against the Revenue. Dismissing the appeals, HELD: A mere right to be considered for distribution of the income or of the corpus of the Trust Fund cannot be regarded as an 'interest ' since it is not capable of valuation. There must be a right, present or contingent, before it can be said that an assessee has an interest. The instant case is one where beyond the specified minimum the assessee was not entitled to anything more. [273F GI Gartside & Anr. vs Inland Revenue Commissioners, LR,[1968] Appeal Cases 553, relied on. Padmavati Jaykrishna Trust & Another vs Commissioner of Wealth Tax, Gujarat, [1966] 61 I.T. R. 66; Commissioner of Wealth Tax Bombay vs Trustees of Mrs. Hansbai Tribhuwandas Trust, [l968] ; Commissioner of Wealth Tax, A. P. vs Trustees of H. E.H. PG NO 266 PG NO 267 Nizam 's Family (Remainder Wealth) Trust, ; Commissioner of Wealth tax A.P. vs Trustees of H.E.H. The Nizam 's Sahabzadi Anwar Begum Trust, ; Leedale (Inspector of ' Taxes] vs Lewis, and McDowell and Co. Ltd. vs Commercial Tax Officer, , distinguished. There is no doubt that the expression 'property ' must bear a comprehensive import. The question remains whether what is conveyed under the three deeds of settlement to the assessee is a right to anything more than the prescribed minimum under each deed. It is apparent that the assessee was entitled only to the minimum prescribed in each of the deeds of settlement. Whether or not he received any further amount out of the net income of the Trust Fund was left entirely in the discretion of the Trustees. There was no right in the assessee to any portion of the net income in excess of the minimum guaranteed to him. It is the minimum alone which he could claim as his property. So also, on the distribution of the accumulated balance as capital at the end of the stipulated period there was no right in him to receive any part thereof. It was open to the Trustees to ignore him altogether and they could pay it to such other members of the family as they chose. [272H; 273.A B] Ahmed G.H. Arriff and Others vs Commissioner of Wealth tax Calcutta referred to. Per Suhyusuchi Mnkhurji. On behalf of the Revenue an appeal was made before us that we should really construe the three Trust Deeds together and see 'the game of the hidden purpose ' behind these Trust Deeds which were. in fact. for the sole and exclusive benefit of the assessee. It is true that tax avoidance an under developed developing economy should not be encouraged on practical as well as ideological grounds. One would wish, that one could get the enthusiasm of Justice Holmes that taxes are the price of civilization and one would like to pay that price to buy civillzation. But the question which many ordinary tax payers very often in a country of shortages with ostentious consumption and deprivation for the large masses ask, is does he with taxes buy civilization or does he facilitate the wastes and ostentiousness of the few. Unless waste and ostentiousness in Government 's spendings are avoided or eschewed, no amount of moral sermons would change people 's attitude to tax avoidance. In any event, however, where the true effect on the construction of the Deeds is clear, as in this case, the appeal to discourage tax avoidance is not a relevant consideration. [274E H; 275A C] PG NO 268 McDowell & Company Limited vs Commercial Tax Office, [l985] referred to.

ivil Appeal Nos. 1168 69 (NT) of 1973. Appeal by Special leave from the Judgment and Order dated 103 the 3rd January, 1973 of the Allahabad High Court in I. T. Ref. No. 450 of 1969. S.C. Manchanda and M. J.P. Malhotra for the Appellant. S.T. Desai, B.B. Ahuja and Miss A. Subhashini for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. These appeals by certificate granted by the High Court of Allahabad under Section 66A(2) of the Indian Income Tax Act, 1922, arise out of judgment delivered and order passed on 3rd January, 1973 by the High Court of Allahabad in Income tax Reference No. 450 of 1965. The following question of law had been referred to the High Court for consideration under Section 66(1) of the Income Tax Act, 1922 by the Appellate Tribunal, Allahabad Bench, Allahabad: "Whether, on the facts and in the circumstances of the case, valid assessments could be made on 31st May, 1962, for the assessment years 1948 49 and 1949 50 on the basis of voluntary returns of income filed under Section 22(1) of the Indian Income Tax Act, 1922 on 18.11.1950? The matter came up before a Division Bench of the High Court and as there was a previous bench decision of that Court in the case of Sool Chand Ram Sewak vs Commissioner of Income tax, U.P. which supported the revenue 's case and as the division bench before whom this case came was unable to accept that view, the division bench referred the case to a larger Bench. This reference thereafter came before a Full Bench consisting of Gulati, H. N. Seth & C.S.P. Singh, JJ. Gulati and C. section P. Singh, JJ. answered the question in the affirmative in favour of the revenue and against the assessee. Seth J. however, was in favour of assessee. In view of the majority the question was answered in favour of the revenue and in affirmative. 104 Before we deal with the question in controversy, it will be necessary to note some of the relevant facts. There were originally four appeals for the assessment years 1946 47, 1947 48, 1948 49 and 1949 50. As the appeals for the assessment years 1946 47 and 1947 48 were withdrawn by the revenue, we are now concerned with appeals for the assessment years 1948 49 and 1949 50. The present assessee is a branch of a bigger Hindu undivided family known as Nathu Ram Jawahar Lal, Jhansi. The bigger Hindu undivided family of M/s Nathu Ram Jawahar Lal was partitioned on 19th May, 1945, and the present assessee along with another smaller H.U.F. came into existence and the said bigger H.U.F. had made a claim in respect of the partition under Section 25A of the Indian Income Tax Act, 1922. While this claim was pending the present assessee filed voluntary returns under Section 22(1) of the Act for the assessment years 1946 47 to 1949 50 on 10th November, 1950. The said claim of partition by the bigger H.U.F. was rejected by the Income tax Officer and also by the Appellate Assistant Commissioner. The said H.U.F. thereafter, filed appeals to the Appellate Tribunal in respect of the order under claim of partition under Section 25A of 1922 Act which by its order dated 31st August, 1954 accepted the claim under Section 25A of 1922 Act, and the Tribunal passed orders on that basis in the appeals relating to the assessment orders in respect of the bigger H.U.F. on 28th October, 1954. The Income tax Officer, thereafter, initiated proceedings under Section 34 of the Income tax Act of 1922 for assessing the smaller Hindu undivided family, the present assessee in view of the fact that the claim for disruption of the bigger H. U. F. had been accepted by the Tribunal. The present assessee filed fresh returns of income on 12.4.1955 in response to notices under Section 34 of 1922 Act. The returns originally filed were under Section 22(1) and were filed on 18th November, 1950. The assessee 's objection regarding the validity of the assessments being made under Section 34 on merits as well as on the point that time for making the assessment under Section 34 had already expired, were rejected by the Income tax Officer. He, therefore, completed the assessments on 8.9.1955 under Section 23(3) read with Section 34 of the Income tax Act, 1922. The assessee could not get any decision in his favour either from the Appellate Assistant Commissioner or from the Tribunal and being aggrieved by these orders, filed a Writ Petition to the High Court of Allahabad challenging the validity of the Appellate 105 orders. The assessee was successful in the Writ and, therefore, the appellate orders were quashed by the High Court. The revenue having failed in its attempt to complete the assessee 's assessments under Section 34, made another attempt to assess the assessee on the basis of the voluntary returns originally filed by the assessee on 18.11.1950 by relying upon the order of the Tribunal dated 28.10.1954 and invoking the provisions of 2nd proviso to Section 34(3). The said assessments which were completed on 31st May, 1962 were the subject matters of appeals before the Tribunal. The point before the Tribunal was whether valid assessments could be made for the assessment years under consideration on 31st May, 1962 on the basis of the returns filed under Section 22(1) of the Act of 1922 on 18th November, 1950. The Appellate Assistant Commissioner by his order held that no valid assessments could be made on 31st May, 1962. It appears that on 28th October, 1950, relating to the assessment years 1946 47 to 1949 50 in case of bigger Hindu undivided family, M/s Nathu Ram Jawaharlal, Jhansi, order was passed by the Tribunal in the appeal relating to the assessments pending before it. It should be noted that originally on the basis that the bigger H.U.F. had not been disrupted assessments for these years had been made and appeals relating to those assessments were pending before the Tribunal. The Tribunal disposed of these appeals by the order dated 28th October, 1954 and the Tribunal in the said order had observed, inter alia, as follows; "The assessments for those years were (have) necessarily to be set aside with the direction that fresh assessments should be made, one for the period 19.5.1945 upto which the Hindu undivided family was in existence and the others on the component Hindu undivided families, namely M/s Jawaharlal Mani Ram and Bhagwan Das Sita Ram. " The Tribunal in the instant appeal out of which the reference was made to the High Court and out of which these appeals arise, after discussing the relevant facts and the provisions of law confirmed the order of the Appellate Assistant Commissioner and dismissed the appeals. As mentioned hereinbefore after the Tribunal had directed the assessments should be made on the component units of the bigger Hindu undivided family, after partition was accepted, namely, the assessee and Jawaharlal Mani Ram, the Income tax Officer instead 106 of proceeding on the basis of the voluntary returns already filed by the assessee proceeded to take action under Section 34(1) (b) of the Act of 1922 and completed the assessments for all the four years on September 8,1955. The assessee appealed against these assessments to the Appellate Assistant Commissioner of Income tax, but before the appeals were taken up for hearing, the assessee moved the High Court of Allahabad under Article 226 of the Constitution. On March 30, 1960, the High Court quashed the assessment orders on the ground that as voluntary returns filed by the assessee were pending, no proceeding could be taken under Section 34 of the Act, 1922. Thereafter the Income tax Officer initiated proceedings on the basis of the voluntary returns. The assessee again filed a writ petition praying for quashing the proceedings on the ground that revenue could not proceed against it on the basis of the voluntary returns. This petition was rejected by the High Court and thereafter the Income tax Officer proceeded to complete the assessments under Section 23(3) and passed assessment orders on 31st May, 1962, in respect of the four years. The first question, is, whether the assessment could be made under Section 23(3) on the basis of voluntary returns filed or action should have been taken under Section 34 with the help of the second proviso to sub section (3) of Section 34. It is well settled that when a return of income is filed by the assessee voluntarily under Section 22(1) of the Act, 1922, assessment proceedings commence against him and Section 34 does not come into play at all so long as the assessment proceedings remain pending. But it was contended that a return exhausted itself after the expiry of four years from the end of the assessment year to which it related. After the expiry of that period, no assessment was possible on the basis of the voluntary return. In such a case assessment was possible under Section 34, if the case was covered by the second proviso to Section 34(3). The High Court was of the opinion that sub section (3) of Section 34 provides a period of limitation of four years for assessment under Section 23 of the Act, 1922. If the assessment proceedings commence by filing of voluntary return, as indeed these do, on the expiry of the period of four years from the end of the year in which the income, profits or gains were first assessable, such proceedings are suspended or interrupted. But neither the proceedings nor the returns become invalid. The High Court referred to the provisions of Section 34(3) and was of the view that since the order was passed by the Tribunal giving direction, the bar or limitation was lifted and 107 the assessments could be made without any bar or limitation. Reference was made to the decision of this Court in the case of Commissioner of Income tax Bombay City II vs Ranchhoddass Karsondas, and in the case of Estate of the late A.M.K.M. Karuppan Chettiar vs Commissioner of Income tax, Madras and Commissioner of Income tax Madras vs M.K.K.R. Muthukaruppan Chettiar. The High Court, on the basis of these decisions, was of the view that assessments could be made on the basis of voluntary returns already filed by the assessee. We are of the opinion that the High Court was right. The next question is whether it was open to the Tribunal to give a finding or direction in respect of the present assessee. Reliance was placed on the decision of this Court in Income tax Officer, A Ward, Sitapur vs Murlidhar Bhagwan Das. There, this court after referring to the expression "any person" in the 2nd proviso of sub section (3) of Section 34 of 1922 Act observed at page 346 of the report as follows. "The expression "any person" in its widest connotation may take in any person, whether connected or not with the assessee, whose income for any year has escaped assessment; but this construction cannot be accepted, for the said expression is necessarily circumscribed by the scope of the subject matter of the appeal or revision, as the case may be. That is to say, that person must be one who would be liable to be assessed for the whole or a part of the income that went into the assessment of the year under appeal or revision. If so construed, we must turn to section 31 to ascertain who is that person other than the appealing assessee who can be liable to be assessed for the income of the said assessment year. A combined reading of section 30(1) and Section 31(3) of the Act indicates the cases where persons other than the appealing assessees might be affected by orders passed by the Appellate Commissioner. Modification or setting aside of assessment made on a firm, joint Hindu family, association 108 of persons, for a particular year may affect the assessment for the said year on a partner or partners of the firm, member or members of the Hindu undivided family or the individual, as the case may be. In such cases though the latter are not co nomine parties to the appeal, their assessments depend upon the assessments on the former. The said instances are only illustrative. It is not necessary to pursue the matter further. We would, therefore, hold that the expression "any person" in the setting in which it appears must be confined to a person intimately connected in the aforesaid sense with the assessments of the year under appeal. " The High Court was of the view that "any person" would include the person who would be liable to be assessed for the whole or a part of the income that went into the assessment of the year under appeal or revision. In that view of the matter, the majority judgment of the High Court on this aspect was in favour of the revenue. Then on the question whether the direction for the assessment could be given in respect of any other year, other than the year in which the partition took place, it was contended that direction could be given only for the assessment year 1946 47. Majority judgment of the High Court found no force in that contention. As this question arose directly for the assessment years 1948 49 and 1949 50 in respect of which the appeals came before the Tribunal in which the directions had been given, the High Court was of the view that it was necessary for the Tribunal to give a finding with regard to the partition of the family and the ownership of the income in both the appeals. The Tribunal was thus competent to give the direction. In that view of the matter, the two learned judges of the Allahabad High Court were of the opinion that assessments were valid and answered the question in favour of the revenue. Referring to the said decision which has been mentioned in the majority judgment, Seth J. however was of the view that the direction given by the Tribunal in this case did not authorise the assessment on the smaller Hindu undivided family. Seth J. was further of the view that such direction could only have been given in the year in which disruption of the bigger H.U.F. took place. In that view of the matter, Seth J. expressed dissent as mentioned hereinbefore. We are of the opinion that the majority of the learned judges of the High Court were right. Second proviso to Section 34(3) of the Indian Income tax Act, 1922 authorised directions to be given by the Tribunal in respect of the assessee or any person beyond four years as provided in Section 34(3) of 1922 Act. 109 As noted before the expression "any person" in respect of whom such direction could be given was explained by this Court in Income tax Officer, A Ward Sitapur vs Murlidhar Bhagwandas (supra). As mentioned in the passage quoted above from the said decision, if so construed then the Court must turn to Section 31 of 1922 Act to a certain who is that person other than the appealing assessees might be affected by the orders passed by the appellate authority. Modification or setting aside of assessment made on a firm, joint Hindu family, association of persons, for a particular year may affect the assessment for the said year on a partner or partners of the firm, member or members of such Hindu undivided family or the individual, as the case might be. It was therefore argued that it was only those types of assessees mentioned by this Court in the passage noted above were the 'persons ' who could be "any person" other than the appealing assessee who can be said to be liable to be assessed and in respect of whom direction might be given, otherwise such directions or provision for such directions if the provision is so read would be ultra vires article 14 of the Constitution. We must make it clear that this Court had itself made it clear categorically in the passage quoted above that the instances given in the above passage were only illustrative passage meaning thereby that the instances were not exhaustive. This Court made it clear that the expression "any person" in its widest amplitude might take in any person connected or not with the assessee, whose income for any year had escaped assessment; but this construction could not be accepted, for the said expression was necessarily circumscribed by the scope of the subject matter of the appeal or revision, as the case might be. So therefore the person must be one who would be liable to be assessed for the whole or any part of the income that went into assessment of the year under appeal or revision (Emphasis supplied). Therefore, this Court observed that "any person" in sub section (3) of Section 34 must be confined to a person intimately connected in the aforesaid sense with the assessments of the years under appeal. Reference may be made to the decision of this Court in the case of Rajinder Nath vs Commissioner of Income tax, Delhi, where the I.T.O. treated two buildings as belonging to a firm comprised of a father and his two major sons as partners and in the assessments on the firm for the assessment years 1955 56 and 1956 57 and he estimated the cost of construction of the buildings at a higher figure than that 110 disclosed and brought to tax the excess as income in the hands of the firm. On appeal, the A.A.C. found that the money advanced for the construction of the buildings had been debited in equal shares to the father and two major sons and a minor son and held that the firm was not the owner of the properties and delected the addition. The A.A.C. also observed that the I.T.O. was free to take action to assess the excess in the hands of the co owners. The I.T.O. thereupon issued notices under Section 147(a) of the I.T. Act, 1961 and reopened the assessments of the individual assessees (the co owners) and included therein the proportionate shares of the additions on account of the estimated excess of the cost of construction. On appeal, the A.A.C. held that Section 147(a) could not apply but upheld the assessments under Section 153(3) (ii) of 1961 Act. On further appeal, the Tribunal held that Section 153(3) (ii) could not apply because there was neither a finding nor a direction in the earlier order of the A.A.C. and further that A.A.C. could not convert the assessments made under Section 147(a) into those under Section 153(3) (ii). On a reference of the questions, (i) whether the A.A.C. was justified in holding that the provisions of Section 147(a) were not applicable, and (ii) whether the provisions of Section 153 (3) (ii) were not applicable, the High Court held that the provisions of Section 153(3) were applicable observing that the A.A.C 's finding that the properties did not belong to the firm and, therefore, the excess amount of the cost of construction could not be regarded as the income of the firm was a finding which was necessary for the disposal of the firm 's appeal and as a corollary it was held that the buildings belonged to the co owners and this necessitated the "direction" to the I.T.O. that he was free to assess the excess in the hands of the co owners. Dealing with this contention, Pathak J. who delivered the judgment of this Court observed at page 20 of the report: "The expression "another person" in the Expln. would include persons intimately connected with the person in whose case the order is made in the sense explained by this Court in Murlidhar Bhagwan Das It is one thing for the partners of a firm to be required to explain the source of a receipt by the firm, it is quite another for them in their individual status to be asked to explain the source of amounts received by them as separate individuals. On such opportunity being provided it would have been open to the assessees to show that the excess alleged over the disclosed cost of construction did not constitute any taxable income. The finding contemplated in Expln. 3, it will be 111 noted, is a finding that the amount represents the income of another person. " In the instant case before us, applying the test observed in that case this was a case where the facts showed that income can belong either to the bigger Hindu undivided family or to the smaller Hindu undivided family, the present assessee along with another smaller H.U.F. and to no one else. Therefore a finding that it belongs or it does not belong to the bigger Hindu undivided family which had disrupted on partition would determine the issue whether it could be taxed in the hands of the present assessee. Judged in the light of the test laid down in Murlidhar Bhagwan Das (supra) and as pointed out in Rajinder Nath 's case, it appears to us that the present assessee can be said to be a person who would be liable to be assessed for the whole or part of the income that went to the assessment of the bigger Hindu undivided family in years under appeal and is a person intimately connected with the assessments of the bigger Hindu undivided family. The income in this case cannot be the income of both bigger Hindu undivided family and the present assessee, it must be either of these two. We are, therefore, of the opinion that directions given in the appeals filed by the bigger Hindu undivided family would be applicable to the present assessee. On behalf of the assessee it was contended that only the categories of persons referred to in Sections 30(1) and 30(3) of 1922 Act would be governed by the said expression "any person" Sub section (3) of Section 31, inter alia, authorises the Appellate Assistant Commissioner in case of an order cancelling registration of a firm under sub section (42) of Section 23 or refusing to register a firm under sub section (4) of Section 23 or Section 26A or to make fresh assessment or to confirm such order, or cancel it and direct the Income tax officer to register the firm or to make a fresh assessment, as the case may be, or in the case of an order under sub section (2) of Section 25 or sub section (1) of Section 23A or sub section (2) of Section 26 or Section 48, 49 or 49F, confirm cancel or vary such order. It also authorises in case of an order under sub section (1) of Section 25A to confirm such order or cancel it and either direct the Income tax officer to make further inquiry and pass a fresh order or to make an assessment in the manner laid down in sub section (2) of section 25A. The other cases were cases of orders under Section 28 or sub section (6) of Section 44E or sub section (5) of Section 44F or sub section (1) of Section 46, 112 or in case of an appeal against a computation of loss under Section 24, confirm or vary such computation, or in case of an appeal under sub section (1A) of Section 30 decide that the person is or is not liable to make the deduction and in the latter case direct the refund of the sum paid under sub section (6) of Section 18. While on these provisions it is material to refer to sub section (4) of Section 33 which authorises the Tribunal after giving both parties an opportunity of being heard to pass such orders thereon as it thinks fit and to communicate any such orders to the assessee and to the Commissioner. The contention on behalf of the assessee is that though the Appellate Tribunal has wide powers as indicated in sub section (4) of Section 33 but the amplitude of that power is curtailed by other provisions. It was contended that read with sub section (3) of Section 34, as assessment order could not be passed after the expiry of four years from the end of the year in which the income, profits or gains were first assessable and is view of the fact that here in the instant case voluntary returns for the years under question had been filed by the assessee within time, after four years no direction could be given by the Tribunal. It was, secondly, contended that the present smaller Hindu undivided family was not intimately connected with the assessment of the bigger Hindu undivided family as contemplated by the observations of this Court in Income tax Officer vs Murlidhar Bhagwan Das (supra), this direction was of no use and the assessment made on the basis of this direction cannot be availed of. We are unable to accept this contention. Firstly it must be observed that the Tribunal passed the orders and gave its direction in respect of the years concerned. These years were the subject matters of appeal before the Tribunal in the case of bigger H.U.F. It was contended that these direction were given subsequent to the order under Section 25A and could not affect position thereafter. We are a unable to accept this position also. As mentioned hereinbefore, the order under Section 25A was passed in August, 1954. The bigger Hindu undivided family had applied for order under Section 25A regarding the disruption of the Hindu undivided family, the Income tax Officer rejected that prayer. The assessee appealed therefrom. In August, 1954, this order was set aside by the Tribunal and it was held that the bigger Hindu undivided family had been disrupted. In as much as the income liable to be assessed on the smaller Hindu undivided family would arise only on the disruption of the larger Hindu 113 undivided family, this direction was proper. The order under Section 25A declares the status of the family and the smaller Hindu undivided family became liable to be assessed as a result of disruption of the bigger Hindu undivided family. The assessment orders however were passed based on the previous order under section 25A but these orders were passed for all these four years and the assessments under appeal for all these four years were pending before the Tribunal in disposing of which the Tribunal gave the direction to make the assessments on the smaller Hindu undivided family. Therefore no question arises as to whether for subsequent periods directions could have been given. This is a direction clearly within the contemplation of sub section (3) of Section 34. Secondly, we are of the opinion that the smaller Hindu undivided family is one of the persons which was clearly contemplated by sub section (3) of Section 34 in the facts and circumstances of this case. The assessability of income and the quantum of the same of the present assessee was linked up with the assessability of the bigger Hindu undivided family if the bigger Hindu undivided family was liable to be assessed if there was no disruption then there was no income of the smaller Hindu undivided family. The income in the hands of smaller Hindu undivided family could then not have been liable to be assessed. I on the other hand it was the other way that there was a valid partition, the bigger Hindu undivided family no longer existed and the smaller Hindu undivided family would be liable to be assessed. From that point of view it clearly comes within the ratio of the observation of this Court in Income tax officer vs Murlidhar Bhagwan Das (supra). Further more looked at from another point of view, though the Karta represented the bigger Hindu undivided family, all the members of the bigger Hindu undivided family, including those who were members of the smaller Hindu undivided family were parties though not oe nomine for all practical purposes, because they were liable as members of the family for the amount assessed. In that view of the matter, we are of the opinion that this direction was quite valid and would be applicable. The observations of this Court in the case of Commissioner of Income tax Central, Calcutta vs National Taj Traders are in consonance with the conclusions reached by us. Tulzapurkar, J. explained in the said decision the situations in which directions could be given under Section 33B of the Income tax Act, 1922 where 114 there was no express provision like sub section (3) of Section 34. In our opinion in the facts of this case, the present assessee can be said to be "any person" as indicated in Murlidhar Bhagwan Das (supra) in Section 34(3) of 1922 Act. The view taken by us is also in consonance with the observation of this Courts in the case of Commissioner of Income tax, Andhra Pradesh vs Vadde Pullaiah & Co.1 Reference was also made to a Bench decision of the Bombay High Court in the case of Mathuradas B. Mohta vs Commissioner of Income tax, Poona, and a decision of this Court in the case of Commissioner of Income tax, U.P. vs Mohd. Shakoor Mohd. Bashir. But in view of the facts and circumstances of the instant case before us, it is not necessary to deal with the said decisions. On behalf of the assessee, reliance was placed on a decision of the Division Bench of Gujarat High Court in the case of Commissioner of Income tax, Gujarat vs Shantilal Punjabhai. There an individual Shantilal was a member of the Hindu undivided family and also a partner of a firm. The Income tax officer found that the assessee was the nominee of the Hindu undivided family in the said firm, and, therefore, included the share of profits the assessee in the said firm, in the total income of the Hindu undivided family. The decision proceeded on the basis that the Income tax Act did not contemplate two different assessees in the same assessment year for the same taxable income. In that case the assessee was also an assessee in his own right. In that case the Court had observed at page 80 of the report that there were two separate and distinct assessment proceedings, one in respect of the assessee in his status as an individual and the other in respect of the Hindu undivided family. The assessment proceedings in respect of the assessee, Shantilal, were in respect of his income arising from his self acquired and separate property. The assessment proceedings against the Hindu undivided family, were proceedings against the entire entity, and though the assessee, Shantilal, was a member of the family, the assessment was on the income derived by the Hindu undivided family from the property or business of the said Hindu undivided family. In that 115 assessment, the income accruing and arising from the separate property of the assessee, Shantilal could not be assessed, as the business carried on by the asseseee, Shantilal, was not the business of the Hindu undivided family. The Income tax Officer held that Shantilal was the nominee of the Hindu undivided family, meaning thereby that the business belonged to the Hindu undivided family and it was that conclusion of the Income tax officer which was reversed by the Tribunal. The Tribunal holding that the revenue had failed to prove that the assessee, Shantilal was the nominee of the family, in other words, that the income arising from the firm 's business was the income of the Hindu undivided family. The direction given by the Tribunal was on the question which was between the revenue and the Hindu undivided family and the only finding that could be given by the Tribunal was between the two parties, namely, the Hindu undivided family and the revenue and not between the revenue and the assessee. Shantilal, who was not an assessee nor a party to those assessment proceedings. Therefore, if any action had to be taken in consequence of the finding or the direction given by the Tribunal, that action could be taken not against the assessee, Shantilal, but against the Hindu undivided family. As would be apparent, the facts of that case were entirely different. Here in the instant case the proceeding against the assessee in the present case could be taken only if there was disruption of the Hindu undivided family. Therefore in the assessment of Hindu undivided family. viz. if the bigger Hindu undivided family was considered to be an existing entity then in such a case the assessment against the present assessee could not be sustained. If on the other hand the assessment on the bigger H.U.F. could not be sustained because there was disruption of the family as contended for by the bigger Hinud undivided family then only the present assessee could be assessed. In that view of the matter, we are of opinion that the present assessee can be said to be. a person other then the appealing assessee would be affected by the order concerned and would come within the meaning of "any person" as explained by this Court in the case of Income tax officer vs Murlidar Bhagwan Das (supra). Decision of this Court in the case of Commissioner of Income tax, Punjab, Jammu & Kashmir and Himachal Pradesh vs section Raghubir Singh Trust was relied on behalf of the assessee. There the res 116 pondent trust created by R. filed its return of income for the assessment year 1954 55. Holding that the trust was invalid, the Income tax officer assessed the income of the trust in the hands of R.R. carried the matter in appeal and other proceedings and ultimately the High Court held that the trust was valid and the income was the income of the trust and not of R. The I.T.O. issued a notice on 19th September, 1961, under Section 34(1)(b) of the Indian I.T. Act, 1922, to reopen the assessment of the trust. The trust claimed that the notice was barred by limitation. The Tribunal accepted the claim and held that trust was a stranger to the proceedings for the assessment of R and the second proviso to Section 34(3) did not save the reassessment proceedings initiated against the trust from the bar of limitation and the High Court, on a reference, agreed with the Tribunal. On appeal to this Court it was held, affirming the decision of the High Court, that even though the finding of the High Court that the income belonged to the trust and not to R was a finding necessary for disposing of the reference in favour of R and it was a "finding", but the trust was a stranger to the assessment proceedings of R. and not "any person" within the meaning of the second proviso to Section 34(3) and, therefore, the second proviso to Section 34(3) was not attracted and the reassessment proceedings against the trust were barred by time. That decision must be understood in the facts of that case. The settler and the trust cannot be said so intimately connected as to come within the ratio of Murlidhar Bhagwan Das 's case. The Court found that assessee trust could not be said to be intimately connected with the assessment of Raghubir Singh. As a result of the trust deed failing, there may be numerous situations viz., there might be resulting trust or it might be that the trust property would go to other beneficiaries. It is not necessary for us to explore or explain those possibilities. But in the facts of this case, we are of the opinion that whether the income of the smaller Hindu undivided family, namely the present assessee is liable to be taxed is so intimately or inextricably linked up with the question of assessability of bigger Hindu undivided family, which again is dependent upon the question whether there was disruption of bigger Hindu undivided family and that being the very subject matter of appeals in the four years in which this direction had been given, we are of the opinion that directions given in this case are valid and would save the assessments against the assessee for the two years in question. In the aforesaid view of the matter, we are of the opinion that 117 the majority of the learned judges of the High Court were right in their conclusions and the question was correctly answered by the majority of the learned judges of the High Court. The appeals therefore fail and are dismissed with costs. H.S.K. Appeals dismissed.

A bigger Hindu undivided family (HUF) had filed income tax returns for the assessment years 1946 47 to 1949 50. When the assessment was being done the bigger (HUF) made a claim under section 25A of the Income Tax Act, 1922, that the said HUF was partitioned on 19.5.1945. While this claim was pending, the appellant along with a smaller HUF (hereinafter referred to as the assessee) which had come into being on partition of the bigger HUF, filed voluntary returns on 18.11.1950 for the assessment years 1946 47 to 1949 50 under s.22(1) of the Act. The bigger HUF 's claim partition, which was rejected by the Income Tax Officer and the Appellate Assistant Commissioner, was accepted by the Appellate Tribunal on 31.8.1954. While disposing of the appeals of the bigger HUF against the assessment orders, the Tribunal gave a direction on 28.10.1954 that assessments be made on the bigger HUF after accepting partition. After the claim of partition was accepted the Income tax Officer sent notices to the assessee for initiating proceedings against him under s.34(1) (b). In response to the notices the assessee filed fresh returns on 12.4.1955. Rejecting the contention of the assessee that the time for making assessment under s.34 had expired, the Income tax Officer completed assessments under section 23(3) read with section 34 on . 8.9.1955. The assessee 's appeal was rejected by the Appellate Assistant Commissioner and the Appellate Tribunal. The assessee filed a writ petition in the High Court which was allowed and the assessment orders were quashed on 30.3.1960. The High Court observed that as voluntary returns filed by the assessee were pending no proceeding could be taken under section 34. Thereafter the Revenue attempted to assess the assessee on the basis of voluntary returns originally filed on 18.11.1950 by relying upon the order of the Tribunal dated 23.10.1954 in the bigger HUF 's case and invoking second proviso to section 34(3). The assessee filed a writ petition and that was dismissed. The Income tax Officer completed assessment under section 23(3) on 31.5.1962. In appeal the Appellate Assistant Commis 101 sioner held that no valid assessment could be made on 31.5.1962 and this view was confirmed by the Appellate Tribunal. A reference was made to the High Court on the question whether on the facts and circumstances of the case, valid assessment could be made on 31.5.1962 for the assessment years 1948 49 and 1949 50 on the basis of voluntary returns of income filed under section 22(1) of the Act. The assessee contended that since a return exhausted itself after expiry of four years from the end of the assessment year to which it related, no assessment could be made on the basis of voluntary return, it could be done under section 34 only if 2nd proviso to sub section (3) of section 34 applied. By majority a full Bench of the High Court answered the question in the affirmative in favour of the revenue. Hence these appeals. The two questions which arose were: (1) whether the assessment could be made under section 23(3) on the basis of voluntary returns filed or action should have been taken under section 34 with the help of the second proviso to sub section (3) of section 34; and (2) whether the Tribunal could give a finding or direction in respect of the assessee. Dismissing the appeals, ^ HELD : On Question No. (1) The High Court was right in taking the view that assessments could be made on the basis of voluntary returns already filed by the assessee. Sub section (3) of section 34 provides a period of limitation of four years for assessment under section 23 of the Act. If the assessment proceedings commence by filing of voluntary returns, as indeed these do, on the expiry of the period of four years from the end of the year in which the income, profits or gains were first assessable, such proceedings are suspended or interrupted. But neither the proceedings nor the returns become invalid. Since the order was passed by the Tribunal giving direction, the bar of limitation provided by section 34(3) was lifted and the assessments could be made without any bar of limitation. [106 G H, 107 A] Commissioner of Income tax Bombay City II vs Ranchhoddass Karsondas, ; Estate of the late A.M.K.M. Karuppan Chettiar vs Commissioner of Income tax, Madras, ; and Commissioner of Income tax Madras vs M.K.K.R. Muthukaruppan Chettiar, , referred to On question No. (2) The High Court rightly answered the question in favour of the revenue on the view that the Tribunal was competent to give the direction in respect of the present assessee. [108 E G] Second proviso to section 34(3) authorises directions to be given by the Tribunal in respect of the assessee or any person beyond four years as provided in section 34(3) of the Act. As explained in Income tax Officer vs Murlidhar Bhagwandas, "any person" in respect of whom such direction could be given must be one who would be liable to be assessed for the whole or a part of the income that went into the assessment of the year under appeal or revision. The court must turn 102 to section 31 of the Act to ascertain who is that person other than the appealing assessee who might be affected by the orders passed by the appellate authority. Modification or setting aside of assessment made on a firm, joint Hindu family, association of persons for a particular year may affect the assessment for the said year on a partner or partners of the firm, member of members of such Hindu undivided family or the individual, as the case might be. These instances are only illustrative and not exhaustive. The expression "any person" in its widest amplitude might take in any person connected or not with the assessee, whose income for any year had escaped assessment; but this construction cannot be accepted, for the said expression was necessarily circumscribed by the scope of the subject matter of the appeal or revision, as the case might be. So therefore the person must be one who would be liable to be assessed for the whole or any part of the income that went into assessment of the year under appeal or revision (Emphasis supplied). Therefore, "any person" in sub section (3) of section 34 must be confined to person intimately connected in the aforesaid sense with the assessments of the years under appeal. [701 C S, 108 A F] Income tax Officer, A Ward, Sitapur vs Murlidhar Bhagwan Das, ; Rajinder Nath vs Commissioner of Income tax, Delhi, ; Commissioner of Income tax, Central, Calcutta vs National Taj Traders, 121 I.T.R. 535; and Commissioner of Income tax, Andhra Pradesh vs Vadde Pullaiah & Co., , referred to. The facts in the instant case show that income can belong either to the bigger Hindu undivided family or to the smaller Hindu undivided family, the present assessee alongwith another smaller H.U.F. and to no one else. Therefore a finding that it belongs or it does not belong to the bigger Hindu undivided family which had disrupted on partition would determine the issue whether it could be taxed in the hands of the present assessee. Judged in the light of the test laid down in Murlidhar Bhagwan Das case and as pointed out in Rajinder Nath 's case, it appears that the present assessee can be said to be a person who would be liable to be assessed for the whole or part of the income that went to the assessment of the bigger Hindu undivided family in years under appeal and is a person intimately connected with the assessments of the bigger Hindu undivided family. The income in this case cannot be the income of both bigger Hindu undivided family and the present assessee, it must be either of these two. Therefore, the directions given in the appeals filed by the bigger Hindu undivided family would be applicable to the present assessee. [111 A D] Commissioner of Income tax, Gujarat vs Shantilal Punjabhai, , distinguished. Commissioner of Income tax, Punjab, Jammu & Kashmir and Himachal Pradesh vs section Raghubir Singh Trust, referred to.

ivil Appeal No. 215 of 1955. Appeal from the judgment and decree dated April 1, 1953, of the Calcutta High Court in Appeal from Original Decree No. 89 of 1946, arising, out of the judgment and decree dated December 4, 1945, of the Subordinate Judge, Darjeeling, in Money Suit No. 5 of 1940. 409 L. K. Jha and D. N. Mukherjee, for the appellant. C. B. Aggarwala, K. B. Bagchi and Sukumar Ghosh, for Respondents Nos. 1 to 5. 1959. March 26. The Judgment of the Court was delivered by SUBBA RAO, J. This appeal filed against the judgment of the High Court of Judicature at Calcutta raises the question of the legality of a partnership to carry on business in wagering contracts. The facts lie in a small compass. They, omitting those not germane to the controversy before us, are as follows: The appellant, Gherulal Parakh, and the first respondent, Mahadeodas Maiya, managers of two joint families entered into a partnership to carry on wagering contracts with two firms of Hapur, namely, Messrs. Mulchand Gulzarimull and Baldeosahay Surajmull. It was agreed between the partners that the said contracts would be made in the name of the respondents on behalf of the firm and that the profit and loss resulting from the transactions would be borne by them in equal shares. In implementation of the said agreement, the first respondent entered into 32 contracts with Mulchand and 49 contracts with Baldeosahay and the nett result of all these transactions was a loss, with the result that the first respondent had to pay to the Hapur merchants the entire amount due to them. As the appellant denied his liability to bear his share of the loss, 'the first respondent along 'With his sons filed O. section No. 18 of 1937 in the Court of the Subordinate Judge, Darjeeling, for the recovery of half of the loss incurred in the transactions with Mulchand. In the plaint he reserved his right to claim any further amount in respect of transactions with Mulchand that might be found due to him after the accounts were finally settled with him. That suit was referred to arbitration and on the basis of the award, the Subordinate Judge made a decree in favour of the first respondent and his sons for a sum of Rs. 3,375. After the final accounts were settled between the first respondent and the two merchants of Hapur and after 52 410 the amounts due to them were paid, the first respondent instituted a suit, out of which the present appeal arises, in the Court of the Subordinate Judge, Darjeeling, for the recovery of a sum of Rs. 5,300 with interest thereon. Subsequently the plaint was amended and by the amended plaint the respondents asked for the same relief on the basis that the firm had been dissolved. The appellant and his sons, inter alia, pleaded in defence that the agreement between the parties to enter into wagering contracts was unlawful under section 23 of the Contract Act, that as the partnership was not registered, the suit was barred under section 69(1) of the Partnership Act and that in any event the suit was barred under section 2, Rule 2 of the Code of Civil Procedure. The learned Subordinate Judge found that the agreement between the parties was to enter into wagering contracts depending upon the rise and fall of the market and that the said agreement was void as the said object was forbidden by law and opposed to public policy. He also found that the claim in respect of the transactions with Mulchand so far as it was not included in the earlier suit was not barred under section 2, Rule 2, Code of Civil Procedure, as the cause of action in respect of that part of the claim did not arise at the time the said suit was filed. He further found that the partnership was between the two joint families of the appellant and the first respondent respectively, that there could not be in law such a partnership and that therefore section 69 of the Partnership Act was not applicable. In the result, he dismissed the suit with costs. On appeal, the learned Judges of the High Court held that the partnership was not between the two joint families but was only between the two managers of the said families and therefore it was valid. They found that the ' partnership to do business was only for a single venture with each one of the two merchants of Hapur and for a single season and that the said partnership was dissolved after the season was over and therefore the suit for accounts of the dissolved firm was not hit by the provisions of subsections (1) and (2) of section 69 of the Partnership Act. 411 They further found that the object of the partnere was to deal in differences and that though the said transactions, being in the nature of wager, were void under section 30 of the , the object was not unlawful within the meaning of section 23 of the said Act. In regard to the claim, the learned Judges found that there was no satisfactory evidence as regards the payment by the first respondent on account of loss incurred in the contracts with Mulchand but it was established that he paid a sum of Rs. 7,615 on account of loss in the contracts entered into with Baldeosahay. In the result, the High Court gave a decree to the first respondent for a sum of Rs. 3,807 8 0 and disallowed interest thereon for the reason that as the suit in substance was one for accounts of a dissolved firm, there was no liability in the circumstances of the case to pay interest. In the result, the 'High Court gave a decree in favour of the first respondent for the said amount together with another small item and dismissed the suit as regards " the plaintiffs other than the first respondent and the defendants other than the appellant ". Before we consider the questions of law raised in the case, it would be convenient at the outset to dispose of questions of fact raised by either party. The learned Counsel for the appellant contends that the finding of the learned Judges of the High Court that the partnership stood dissolved after the season was over was not supported by the pleadings or the evidence adduced in the case. In the plaint as originally drafted and presented to the Court, there was no express reference to the fact that the business was dissolved and no relief was asked for accounts ' of the dissolved firm. But the plaint discloses that the parties jointly entered into contracts with two merchants between March 23, 1937, and June 17, 1937, that the plaintiffs obtained complete accounts of profit and loss on the aforesaid transactions from the said merchants after June 17, 1937, that they issued a notice to the defendants to pay them a sum of Rs. 4,146 4 3, being half of the total payments made by them on account of 412 the said contracts and that the defendants denied their liability. The suit was filed for recovery of the said amount. The defendant filed a written statement on June 12, 1940, but did not raise the plea based on section 69 of the Partnership Act. He filed an additional written statement on November 9, 1941, expressly setting up the plea. Thereafter the plaintiffs prayed for the amendment of the, plaint by adding the following to the plaint as paragraph 10: " That even Section 69 of the Indian Partnership Act is not a bar to the present suit as the joint business referred to above was dissolved and in this suit the Court is required only to go into the accounts of 'the said joint business ". On August 14, 1942, the defendant filed a further additional written statement alleging that the allegations in paragraph 2 were not true and that as no date of the alleged dissolution had been mentioned in the plaint, the plaintiffs ' case based on the said alleged dissolution was not maintainable. It would be seen from the aforesaid pleadings that though an express allegation of the fact of dissolution of the partnership was only made by an amendment on November 17, 1941, the plaint as originally presented contained all the facts sustaining the said plea. The defendants in their written statement, inter alia, denied that there was any partnership to enter into forward contracts with the said two merchants and that therefore consistent with their case they did not specifically deny the said facts. The said facts, except in regard to the question whether the partnership was between the two families or only between the two managers of the families on which there was difference of view between the Court of the Subordinate Judge and the High Court, were concurrently found by both the Courts. It follows from the said findings that the partnership was only in respect of forward contracts with two specified individuals and for a particular season. But it is said that the said findings were not based on any evidence in the case. It is true that the documents did not clearly indicate any period limiting the operation of the partnership, but from the attitude adopted by the 413 defendants in the earlier suit ending in an award and that adopted in the present pleadings, the nature of the transactions and the conduct of the parties, no other conclusion was possible than that arrived at by the High Court. If so, section 42 of the Partnership Act directly applies to this case. Under that section in the absence of a contract to the contrary, a firm is dissolved, if it is constituted to carry out one or more adventures or undertakings, by completion thereof. In this case, the partnership was constituted to carry out contracts with specified persons during a particular season and as the said contracts were closed, the partnership was dissolved. At this stage a point raised by the learned Counsel for the respondents may conveniently be disposed of. The learned Counsel contends that neither the learned Subordinate Judge nor the learned Judges of the High Court found that the first respondent entered into any wagering transactions with either of the two merchants of Hapur and therefore no question of illegality arises in this case. The law on the subject is wellsettled and does not call for any citation of cases. To constitute a wagering contract there must be proof that the contract was entered into upon terms that the performance of the contract should not be demanded, but only the difference in prices should be paid. There should be common intention between the parties to the wager that they should not demand delivery of the goods but should take only the difference in prices on the happening of an event. Relying upon the said legal position, it is contended that there is no evidence in the case to establish that there was a common intention between the first respondent and the Hapur merchants not to take delivery of possession but only to gamble in difference in prices. This argument, if we may say so, is not really germane to the question raised in this case. The suit was filed on the basis of a dissolved partnership for accounts. The defendants contended that the object of the partnership was to carry on wagering transactions, i. e., only to gamble in differences without any intention to give or take delivery of goods. The Courts, on the evidence, both 414 direct and circumstantial, came to the conclusion that the partnership agreement was entered into with the object of carrying on wagering transactions wherein there was no intention to ask for or to take delivery of goods but only to deal with differences. That is a concurrent finding of fact, and, following the usual practice of this Court, we must accept it. We, therefore, proceed on the basis that the appellant and the first respondent entered into a partnership for carrying on wagering transactions and the claim related only to the loss incurred in respect of those transactions. Now we come to the main and substantial point in the case. The problem presented, with its different facets, is whether the said agreement of partnership is unlawful within the meaning of section 23 of the . Section 23 of the said Act, omitting portions unnecessary for the present purpose, reads as follows : " The consideration or object of an agreement is lawful, unless it is forbidden by law, or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. " Under this section, the object of an agreement, whether it is of partnership or otherwise, is unlawful if it is forbidden by law or the Court regards it as immoral or opposed to public policy and in such cases the agreement itself is void. The learned Counsel for the appellant advances his argument under three sub heads: (i) the object is forbidden by law, (ii) it is opposed to public policy, and (iii) it is immoral. We shall consider each one of them separately. (i) forbidden by law: Under section 30 of the , agreements by way of wager are void; and no suit shall be brought for recovering anything 415 alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made. Sir William Anson 's definition of " wager " as a promise to give money or money 's worth upon the determination or ascertainment of an uncertain event accurately brings out the concept of wager declared void by section 30 of the Contract Act. As a contract which provides for payment of differences only without any intention on the part of either of the parties to give or take delivery of the goods is admittedly a wager within the meaning of section 30 of the Contract Act, the argument proceeds, such a transaction, being void under the said section, is also forbidden by law within the meaning of section 23 of the Contract Act. The question, shortly stated, is whether what is void can be equated with what is forbidden by law. This argument is not a new one, but has been raised in England as well as in India and has uniformly been rejected. In England the law relating to gaming and wagering contracts is contained in the Gaming Acts of 1845 and 1892. As the decisions turned upon the relevant provisions of the said Acts, it would help to appreciate them better if the relevant sections of the two Acts were read at this stage: Section 18 of the Gaming Act, 1845: " Contracts by way of gaming to be void, and wagers or sums deposited with stakeholders not to be recoverable at law Saving for subscriptions for prizes. . . . All contracts or agreements, whether by parole or in writing, by way of gaming or wagering, shall be null and void; and. . no suit shall be brought or maintained in any court of law and equity for recovering any sum of money or valuable thing alleged to be won upon any wager, or which shall have been deposited in the hands of any person to abide the event on which any wager shall have been made: Provided always, that this enactment shall not be deemed to apply to any subscription or contribution, or agreement to subscribe or contribute, for or towards any plate, prize or sum of money to be awarded to the winner or winners of any lawful game, sport, pastime or exercise." 416 Section 1 of the Gaming Act, 1892: " Promises to repay sums paid under contracts void by 8 & 9 Viet. c 109 to be null and void. Any promise, express or implied, to pay any person any sum of money paid by him under or in respect of any contract or agreement rendered null and void by the Gaming Act, 1845, or to pay any sum of money by way of commission, fee, reward, or otherwise in respect of any such contract, or of any services in relation thereto or in connexion therewith, shall be null and void, and no action shall be brought or maintained to recover any such sum of money. " While the Act of 1845 declared all kinds of wagers or games null and void, it only prohibited the recovery of money or valuable thing won upon any wager or desposited with stakeholders. On the other hand, the Act of 1892 further declared that moneys paid under or in respect of wagering contracts dealt with by the Act of 1845 are not recoverable and no commission or reward in respect of any wager can be claimed in a court of law by agents employed to bet on behalf of their principals. The law of England till the passing of the Act of 1892 was analogous to that in India and the English law on the subject governing a similar situation would be of considerable help in deciding the present case. Sir William Anson in his book " On Law of Contracts " succinctly states the legal position thus, at page 205: ". . . the law may either actually forbid an agreement to be made, or it may merely say that if it is made the Courts will not enforce it. In the former case it is illegal, in the latter only void; but inasmuch as illegal contracts are also void, though void contracts are not necessarily illegal, the distinction is for most purposes not important, and even judges seem sometimes to treat the two terms as inter changeable. " The learned author proceeds to apply the said general principles to wagers and observes, at page 212, thus: "Wagers 'beidg only void, no taint of illegality attached to a transaction, whereby one man employed another to make bets for him; the ordinary rules which 417 govern the relation of employer and employed applied in such a case. " Pollock and Mulla in their book on Indian Contract define the phrase ',forbidden by law " in section 23 thus, at page 158: "An act or undertaking is equally forbidden by law whether it violates a prohibitory enactment of the Legislature or a principle of unwritten law. But in India, where the criminal law is codified, acts forbidden by law seem practically to consist of acts punishable under the Penal Code and of acts prohibited by special legislation, or by regulations or orders made under authority derived from the Legislature. " Some of the decisions, both English and Indian, cited at the Bar which bring out the distinction between a contract which is forbidden by law and that which is void may now be noticed. In Thacker vs Hardy (1), the plaintiff, a broker, who was employed by the defendant to speculate for him upon the stock Exchange, entered into contracts on behalf of the defendant with a third party upon which he (the plaintiff) became personally liable. He sued the defendant for indemnity against the liability incurred by him and for commission as broker. The Court held that the plaintiff was entitled to recover notwithstanding the provisions of 8 & 9 Viet. c. 109, section 18 (English Gaming Act, 1845). Lindley, J., observed at page 687: " Now, if gaming and wagering were illegal, I should be of opinion that the illegality of the transactions in which the plaintiff and the defendant were engaged would have tainted, as between themselves, whatever the plaintiff had done in futherance of their illegal designs, and would have precluded him from claiming, in a court of law, any indemnity from the defendant in respect of the liabilities he had incurred: Cannan vs Bryce ; McKinnell vs Robinson ; ; Lyne vs Siesfeld (1 H. & N. 278). But it has been held that although gaming and wagering contracts cannot be enforced, they are (1) 53 418 not illegal. Fitch vs Jones ; is plain to that effect. Money paid in discharge of a bet is a good consideration for a bill of exchange: Oulds vs Harrison ; ; and if money be so paid by a plaintiff at the request of a defendant, it can be recovered by action against him : Knight vs Camber ; ; Jessopp vs Lutwyoho ; ; Rosewarne vs Billing (15 C. B. (N. section) 316); and it has been held that a request to pay may be inferred from an authority to bet: Oldham vs Ramsden Having regard to these decisions, I cannot hold that the statute above referred to precludes the plaintiff from maintaining this action. " In Read vs Anderson.(1) where an agent was employed to make a bet in his own name on behalf of his principal, a similar question arose for consideration. Hawkins, J., states the legal position at page 104 : " At common law wagers were not illegal, and before the passing of 8 & 9 Vict. c. 109 actions were constantly brought and maintained to recover money won upon them. The object of 8 & 9 Viet. c. 109 (passed in 1845) was not to render illegal wagers which up to that time had been lawful, but simply to make the law no longer available for their enforcement, leaving the parties to them to pay them or not as their sense of honour might dictate." After citing the provisions of section 18 of that Act, the learned Judge proceeds to observe thus, at page 105 : " There is nothing in this language to affect the legality of wagering contracts, they are simply rendered null and void; and not enforceable by any process of law. A host of authorities have settled this to be the true effect of the Statute." This judgment of Hawkins, J., was confirmed on appeal (reported in 13 Q. B. 779) on the ground that the agency became irrevocable on the making of the bet. The judgment of the Court of Appeal cannot be considered to be a direct decision on the point. The said principle was affirmed by the Court of Appeal again in Bridger vs Savage (2). There the plaintiff sued his (1) (2) 419 agent for the amount received by him in respect of the winnings from the persons with whom the agent had betted. Brett, M. R., observed at page 366 : ". . the defendant has received money which he contracted with the plaintiff to hand over to him when he had received it. That is a perfectly legal contract ; but for the defendant it has been contended that the statute 8 & 9 Vict. c. 109, section 18, makes that contract illegal. The answer is that it has been held by the Courts on several occasions that the statute applies only to the original contract made between the persons betting, and not to such a contract as was made here between the plaintiff and defendant. " Bowen, L. J., says much to the same effect at page 367: "Now with respect to the principle involved in this case, it is to be observed that the original contract of betting is not an illegal one, but only one which is void. If the person who has betted pays his bet, he does nothing wrong; he only waives a benefit which the statute has given to him, and Confers a good title to the money on the person to whom he pays it. Therefore when the bet is paid the transaction is completed, and when it is paid to an agent it cannot be contended that it is not a good payment for his prin cipal. . So much, therefore, for the principle governing this case. As to the authorities, the cases of Sharp vs Taylor , Johnson vs Lansley (12 C. B. 468), and Beeston vs Beeston (I exhibit D. 13), all go to shew that this action is maintainable, and the only authority the other way is that of Beyer vs Adams , and that case cannot be supported, and is not law. " This case lays down the correct principle and is supported by earlier authorities. The decision in Partridge vs Mallandaine (1) is to the effect that persons receiving profits from betting systematically carried on by them are chargeable with income tax on such profits in respect of a " vocation " under 5 & 6 Vict. c. 35 (the Income Tax Act) Schedule D. Hawkins, J., rejecting the argument that the (1) 420 profession of bookmakers is not a calling within the meaning of the Income Tax Act, makes the following observations, at page 278: "Mere betting is not illegal. It is perfectly lawful for a man to bet if he likes. He may, however, have a difficulty in getting the amount of the bets from dishonest persons who make bets and will not pay. " The decision in Hyams vs Stuart King (1) deals with the problem of the legality of a fresh agreement between parties to a wager for consideration. There, two bookmakers had betting transactions together, which resulted in the defendant giving the plaintiff a cheque for the amount of bets lost to him. At the request of the defendant, the cheque was held over by the plaintiff for a time, and part of the amount of the cheque was paid by the defendant. Subsequently a fresh verbal agreement was come to between the parties, by which, in consideration of the plaintiff holding over the cheque for a further time and refraining from declaring the defendant a defaulter and thereby injuring him with his customers, the defendant promised to pay the balance owing in a few days. The balance was never paid and the plaintiff filed a suit to recover the money on the basis of the fresh verbal agreement. The Court of Appeal, by a majority, Fletcher Moulton, L. J., dissenting, held that the fresh verbal agreement was supported by good consideration and therefore the plaintiff was entitled to recover the amount due to him. At page 705, Sir Gorell Barnes posed the following three questions to be decided in the case: (1) Whether the new contract was itself one which falls within the provisions of 8 & 9 Vict. c. 109, section 18; (2) whether there was any illegality affecting that contract; and (3) whether that contract was a lawful contract founded on good consideration. Adverting to the second question, which is relevant to the present case, the President made the following observations at page 707: ". . . it is to be observed that there was nothing illegal in the strict sense in making the bets. (1) 421 They were merely void under 8 & 9 Vict. c. 109, and there would have been no illegality in paying them. There is no doubt whatever about this. There was also nothing illegal in giving the cheque nor would there have been any illegality in paying it, though the defendants could not have been compelled by the plaintiff to pay it, because by statute it was to be deemed and taken to have been made and given for an illegal consideration, and therefore void in the hands of the plaintiff. . The statutes do not make the giving or paying of the cheque illegal, and impose no penalty for so doing. Their effect and intention appear only, so far as material, to be that gaming or wagering contracts cannot be enforced in a Court of Law or Equity. . . " The view expressed by the President is therefore consistent with the view all along accepted by the Courts in England. This case raised a now problem, namely, whether a substituted agreement for consideration between the same parties to the wager could be enforced, and the majority held that it could be enforced, while Fletcher Moulton, L. J., recorded his dissent. We shall have occasion to notice the dissenting view of Fletcher Moulton, L. J., at a later stage. The aforesaid decisions establish the proposition that in England a clear distinction is maintained between a contract which is void and that which is illegal and it has been held that though a wagering contract is void and unenforceable between parties, it is not illegal and therefore it does not affect the validity of a collateral contract. 'The same principle has been applied to collateral contracts of partnership also. In Thwaites vs Coulthwaite (1) the question of legality of a partnership of bookmaking and betting was raised. There the plaintiff and defendant were partners in a bookmakers and betting business, which was carried on by the defendant; the plaintiff claimed an account of the profits of the partnership, and the defendant contended that, having regard to the nature of the business, no such relief could be obtained. Chitty, J., rejected the (1) 422 plea holding that the partnership was valid, for the following reasons, among others, and stated at page 498: " The Gaming Act, 1845 (8 & 9 Vict. c. 109), did not make betting illegal; this statute, as is well known, merely avoided the wagering contract. A man may make a single bet or many bets; he may habitually bet; he may carry on a betting or bookmakers business within the statute, provided the business as carried on by him does not fall within the prohibition of the Betting Act, 1853. " In Thomas vs Day (1), a similar question arose. There the plaintiff claimed an account and money due under a partnership which he alleged had existed between himself and the defendant to take an office and carry on a betting business as bookmakers. Darling, J., held that a partnership to carry on the business of a bookmaker was not recognized by law, that even if there was such a legal partnership, an action for account would not lie as between the two bookmakers founded on betting and gambling transactions. This judgment certainly supports the appellant; but the learned Judge did not take notice of the previous decision on the subject and the subsequent decisions have not followed it. When a similar objection was raised in Brookman vs Mather (2), Avery, J., rejected the plea and gave a decree to the plaintiff. There the plaintiff and the defendant entered into a partnership to carry on a betting business. Two years thereafter, in 1910, the partnership was dissolved and a certain amount was found due to the plaintiff from the defend ant and the latter gave the former a promissory note for that amount. A suit was filed for the recovery of the amount payable under the promissory note. Avery, J., reiterated the principle that betting was not illegal per se. When the decision in Thomas vs Day(1) was cited in support of the broad principle that the betting business could not be recognized as legal in a Court of Justice, the learned Judge pointed out that that case was decided without reference to Thwaites (1) (2) 423 vs Coulthwaite (1). This judgment, therefore, corrected the deviation made by Darling, J., in Thomas vs Day(2 ) and put the case law in line with earlier precedents. The earlier view was again accepted and followed in Keen vs Price (3) where an action by one of the partners in a bookmakers and betting business against the other for an account of the partnership dealings was entertained. But the Court gave liberty to the defendant to object to repaying anything which represented profits in such business. The reason for this apparent conflict between the two parts of the decision is found in the express terms of the provisions of the Gaming Act of 1892. Commenting upon Thwaites vs Coulthwaite (1) in which Chitty, J., held that such an action would lie for an account of the profits of the partnership, Sargant, J., pointed out that in that case the Gaming Act, 1892, was not referred to. At page 101, the learned Judge says: " Curiously enough, in that case the Gaming Act, 1892, was not referred to, and although the decision is a good one on the general law, it cannot be regarded as a decision on the Act of 1892. " This judgment confirms the principle that a wager is not illegal, but states that after the Gaming Act, 1892, a claim in respect of that amount even under a collateral agreement is not maintainable. In O 'Connor and Ould vs Ralston (4), the plaintiff, a firm of bookmakers, filed a suit claiming from the defendant the amount of five cheques drawn by him upon his bank in payment of bets which he had lost to them and which had been dishonoured on presentation. Darling, J., held that as the plaintiffs formed an association for the purpose of carrying on a betting business, the action would not lie. In coming to that conclusion the learned Judge relied upon the dissenting view of Fletcher Moulton, L. J., in Hyams vs Stuart King We shall consider that decision at a later stage. (1) (2) (3) (4) (5) 424 The opinion of Darling, J., was not accepted in Jeffrey Co. vs Bamford (1) wherein McCardie, J., held that a partnership for the purpose of carrying on a betting and bookmakers business is not per se illegal or impossible in law. The learned Judge says at page 356: ". . betting or wagering is not illegal at common law. . It has been repeatedly pointed out that mere betting on horse races is not illegal ". The learned Judge, after noticing the earlier decisions already considered by us and also some of the observations of Fletcher Moulton, L. J., came to the conclusion that the partnership was not illegal. We shall now scrutinize the decision in Hill vs William Hill (I) to see whether there is any substance in the argument of the learned Counsel for the appellant that this decision accepted the dissenting view of Fletcher Moulton, L. J., in Hyams vs Stuart King (3) or the view of Darling, J., in Thomas vs Day (4) and O 'Connor and Ould vs Ralston (5). The facts in that case were: The appellant had betting transactions with the respondents, a firm of bookmakers. As a result of those transactions, the appellant lost pound 3,635 12 6. As the appellant was unable to pay the amount, the matter was referred to the committee of Tattersalls, who decided that the appellant should pay the respondents a sum of pound 635 12 6 within fourteen days and the balance by monthly instalments of pound 100. It was laid down that if the appellant failed to make those payments, he was liable to be reported to the said committee which would result in his being warned off Newmarket Heath and posted as defaulters The appellant informed the respondents that he was unable to pay the pound 635 12 6 within the prescribed time and offered to send them a cheque for that sum post dated October 10, 1946, and to pay the monthly instalments of pound 100 thereafter. On the respondents agreeing to that course, the appellant sent a post dated cheque to (1) (2) (3) (4) (5) 425 them and also enclosed a letter agreeing to pay the monthly instalments. As the post dated cheque was dishonoured and the appellant failed to pay the entire amount, the respondents filed a suit claiming the amount due to them under the subsequent agreement. The respondents contended that the sum the appellant had promised to pay was not money won upon a wager within the meaning of the second branch of section 18, but was money due under a new lawful and enforceable agreement and that even if the sum was to be regarded as won on a wager, the agreement was outside the scope of the second branch of section 18 of the Gaming Act, 1845. The House of Lords by a majority of 4 to 3 held that the agreement contained a new promise to pay money won upon a wager and that the second branch of section 18 applied to all suits brought to recover money alleged to have been won on a wager and therefore the contract was unenforceable. In coming to that conclusion, Viscount Simon, one of the Judges who expressed the majority view, agreed with Fletcher Moulton, L. J., in holding that the bond constituted an agreement to pay money won upon a wager, notwithstanding the new consideration, and was thus unenforceable under the second limb of section 18. In Hyams vs Stuart King(1), the facts of which we have already given, the suit was filed on the basis of a subsequent agreement between the same parties to the wager. The majority of the Judges held that the subsequent agreement was supported by good consideration, while Fletcher Moulton, L. J., dissented from that view. The basis for the dissenting view is found at page 712. After reading section 18 of the Gaming Act, 1845, the learned Judge proceeded to state: " In my opinion too little attention has been paid to the distinction between the two parts of this enactment, and the second part has been treated as being in effect merely a repetition of the first part. I cannot accept such an interpretation. So far as the actual wagering contract is concerned, the earlier provision is ample. It makes that contract absolutely void, (1) 54 426 and it would be idle to enact in addition that no suit should be brought upon a contract that had thus been rendered void by statute. The language of the later provision is in my opinion much wider. It provides with complete generality that no action shall be brought to recover anything alleged to be won upon any wager, without in any way limiting the application of the provision to the wagering contract itself. In other words, it provides that wherever the obligation under a contract is or includes the payment of money won upon a wager, the Courts shall not be used to enforce the performance of that part of the obligation ". These observations must be understood in the context of the peculiar facts of that case. The suit was between the parties to the wager. The question was whether the second part of the concerned section was comprehensive enough to take in an agreement to recover the money won upon a wager within the meaning of that part. Fletcher Moulton, L. J., held that the second part was wide and comprehensive enough to take in such a claim, for the suit was, though on the basis of a substituted agreement, for the recovery of the money won upon a wager within the meaning of the words of that part of the section. The second question considered by the learned Judge was whether the defendants ' firm which was an association formed for the purpose of a betting business was a legal partnership under the English Law. The learned Judge relied upon the Gaming Act. 1892 in holding that it was not possible under the English law to have any such partnership. At page 718, the learned Judge observed : In my opinion no such partnership is possible under English law. Without considering any other grounds of objection to its existence, the language of the Gaming Act, 1892, appears to me to be sufficient to establish this proposition. It is essential to the idea of a partnership that each partner is an agent. of the partnership and (subject to the provisions of the partnership deed) has authority to make payments on its behalf for partnership purposes, for which he is entitled 427 to claim credit in the partnership accounts and thus receive, directly or indirectly, repayment. But by the Gaming Act, 1892, all promises to pay any person any sum of money paid by him in respect of a wagering contract are null and void. These words are wide enough to nullify the fundamental contract which must be the basis of a partnership, and therefore in my opinion no such partnership is possible, and the action for this reason alone was wrongly framed and should have been dismissed with costs ". It would be seen from the said observations that Fletcher Moulton, L. J., laid down two propositions: (i) The second part of section 18 of the Gaming Act, 1845, was comprehensive enough to take in a claim for the recovery of money alleged to be won upon a wager though the said claim was based upon a substituted contract between the same parties; and (ii) by reason of the wide terms of the Gaming Act, 1892, even the fundamental contract, which was the basis of a partnership, was itself a nullity. The learned Lord Justice did not purport to express any opinion on the effect of a void contract of wager on a collateral contract. In Hill 's case (1) the only question that arose was whether the second part of section 18 was a bar to the maintainability of a suit under a substituted agreement for the recovery of money won upon a wager. The majority accepted the view of Fletcher Moulton, L. J., on the first question. The second question did not arise for consideration in that case. The House of Lords neither expressly nor by necessary implication purported to hold that collateral contract of either partnership or agency was illegal; and that the long catena of decisions already referred to by us were wrongly decided. This judgment does not therefore support the contention of the learned Counsel for the appellant. The legal position in India is not different. Before the Act for Avoiding Wagers, 1848, the law relating to wagers that was in force in British India was the common law of England. The Judicial Committee in Ramloll Thackoorseydass vs Soojumnull Dhondmull (2) (1) (2) (1848) 4 M.I.A. 339. 428 expressly ruled that the common law of England was in force in India and under that law an action might be maintained on a wager. The wager dealt with in that case was upon the average price which opium would fetch at the next Government sale at Calcutta. Lord Campbell in rejecting the plea that the wager was illegal observed at page 349: " The Statute, 8 & 9 Viet. c. 109, does not extend to India ' and although both parties on the record are Hindoos, no peculiar Hindoo law is alleged to exist upon the subject; therefore this case, must be decided by the common law of England ". It is a direct decision on the point now mooted before us and it is in favour of the respondents. Again the Privy Council considered a similar question in Doolubdass Pettamberdass vs Ramloll Thackoorseydass and others There again the wager was upon the price that the Patna opium would fetch at the next Government sale at Calcutta. There the plaintiff instituted a suit in the Supreme Court of Bombay in January, 1847, to recover the money won on a wager. After the suit was filed, Act 21 of 1848 was passed by the Indian Legislature where under all agreements whether made in speaking, writing, or otherwise, by way of gaming or wagering, would be null and void and no suit would be allowed in any Court of Law or Equity for recovering any sum of money or valuable thing alleged to be won on any wager. This section was similar in terms to that of section 18 of the Gaming Act, 1845. Their Lordships held that the contract was not void and the Act 21 of 1848 would not invalidate the contracts entered into before the Act came into force. Adverting to the next argument that under Hindu Law such contracts were void, they restated their view expressed in Ramloll Thackoorserdas vs Soojumnull Dhondmull (2) thus at page 127: " Their Lordships have already said that they are not satisfied from the authorities referred to, that such is the law among the Hindoos. " The Judicial Committee again restated the law in similar terms in Raghoonauth Sahoi Chotayloll vs (1) (1850) 5 M.I.A. 109. (2) (1848) 4 M.I.A. 339. 429 Manickchund and Kaisreechund (1). There the Judicial Committee held that a wagering contract in India upon the average price opium would fetch at a future Government sale, was legal and enforceable before the passing of the Legislative Act, No. 21 of 1848. The aforesaid three decisions of the Privy Council clearly establish the legal position in India before the enactment of the Act 21 of 1848, namely, that wagering contracts were governed by the common law of England and were not void and therefore enforceable in Courts. They also held that the Hindu Law did not prohibit any such wagers. The same view was expressed by the Indian Courts in cases decided after the enactment of the Contract Act. An agent who paid the amount of betting lost by him was allowed to recover the same from his principal in Pringle vs Jafar Khan (2). The reason for that decision is given at page 445: " There was nothing illegal in the contract; betting at horse races could not be said to be illegal in the sense of tainting any transaction connected with it. This distinction between an agreement which is only void and one in which the consideration is also unlawful is made in the Contract Act. Section 23 points out in what cases the consideration of an agreement is unlawful, and in such cases the agreement is also void, that is, not enforceable at law. Section 30 refers to cases in which the agreement is only void, though the consideration is not necessarily unlawful. There is no reason why the plaintiff should not recover the sum paid by him. . " In Shibho Mal vs Lachman Das (3) an agent who paid the losses on the wagering transactions was allowed to recover the amounts he paid from his principal. In Beni Madho Das vs Kaunsal Kishor Dhusar (4) the plaintiff who lent money to the defendant to enable him to pay off a gambling debt was given a decree to recover the same from the defendant. Where two partners entered into a contract of wager with a third (1) (1856) 6 M.I.A. 251. (3) All. (2) All. (4) All. 430 party and one partner had satisfied his own and his co partner 's liability under the contract, the Nagpur High Court, in Md. Gulam Mustafakhan vs Padamsi (1) held that the partner who paid the amount could legally claim the other partner 's share of the loss. The learned Judge reiterated the same principle accepted in the decisions cited supra, when he said at page 49: " Section 30 of the does not affect agreements or transactions collateral to wagers. . " The said decisions were based upon the well settled principle that a wagering contract was only void, but not illegal, and therefore a collateral contract could be enforced. Before closing this branch of the discussion, it may be convenient to consider a subsidiary point raised by the learned Counsel for the appellant that though a contract of partnership was not illegal, in the matter of accounting, the loss paid by one of the partners on wagering transactions, could not be taken into consideration. Reliance is placed in support of this contention on Chitty 's Contract, p. 495, para. 908, which reads: " Inasmuch as betting is not in itself illegal, the law does not refuse to recognise a partnership formed for the purpose of betting. Upon the dissolution of such a partnership an account may be ordered. Each partner has a right to recover his share of the capital subscribed, so far as it has not been spent; but he cannot claim an account of profits or repayments of amounts advanced by him which have actually been applied in paying the bets of the partnership. " In support of this view, two decisions are cited. They are: Thwaites vs Coulthwaite (2 ) and Saffery vs Mayer(3). The first case has already been considered by us. There, Chitty, J., in giving a decree for account left open the question of the legality of certain transactions till it arose on the taking of the (1) A.I.R. (1923) Nag. 48. (2) (3) 431 account. Far from helping the appellant, the observations and the actual decision in that case support the respondents ' contention. The reservation of the question of particular transactions presumably related only to the transactions prohibited by the Betting Act, 1853. Such of the transactions which were so prohibited by the Betting Act would be illegal and therefore the contract of partnership could not operate on such transactions. The case of Saffery vs Mayer(1) related to a suit for recovery of money advanced by one person to another for the purpose of betting on horses on their joint account. The appellate Court held that by reason of the provisions of the Gaming Act, 1892, the action was not maintainable. This decision clearly turned upon the provisions of the Gaming, Act, 1892. Smith, M. R., observed that the plaintiff paid the money to the defendant in respect of a contract rendered null and void and therefore it was not recoverable under the second limb of that section. The other Lord Justices also based their judgments on the express words of the Gaining Act, 1892. It will be also interesting to note that the Court of Appeal further pointed out that Chitty, J., in Thwaites ' Case(2) in deciding in the way he did omitted to consider the effect of the provisions of the Gaming Act, 1892, on the question of maintainability of the action before him. The aforesaid passage in Chitty 's Contract must be understood only in the context of the provisions of the Gaming Act, 1892. The aforesaid discussion yields the following results: (1) Under the common law of England a contract of wager is valid and therefore both the primary contract as well as the collateral agreement in respect thereof are enforceable; (2) after the enactment of the Gaming Act, 1845, a wager is made void but not illegal in the sense of being forbidden by law, and thereafter a primary agreement of wager is void but a collateral agreement is enforceable; (3) there was a conflict on the question whether the second part of section 18 of the Gaming Act, 1845, would cover a case for the recovery of money or valuable thing alleged to be won upon (1) (2) 432 any wager under a substituted contract between the same parties: the House of Lords in Hill 's Case,(1) had finally resolved the conflict by holding that such a claim was not sustainable whether it was made under the original contract of wager between the parties or under a substituted agreement between them; (4) under the Gaming Act, 1892, in view of its wide and comprehensive phraseology, even collateral contracts, including partnership agreements, are not enforceable; (5) section 30 of the is based upon the provisions of section 18 of the Gaming Act, 1845, and though a wager is void and unenforceable, it is not forbidden by law and therefore the object of a collateral agreement is not unlawful under section 23 of the Contract Act; and (6) partnership being an agreement within the meaning of section 23 of the , it is not unlawful, though its object is to carry on wagering transactions. We, therefore, hold that in the present case the partnership is not unlawful within the meaning of section 23(A) of the Contract Act. (ii) Public Policy: The learned Counsel for the appellant contends that the concept of public policy is very comprehensive and that in India, particularly after independence, its content should be measured having regard to political, social and economic policies of a welfare State, and the traditions of this ancient country reflected in Srutis, Smritis and Nibandas. Before adverting to the argument of the learned Counsel, it would be convenient at the outset to ascertain the meaning of this concept and to note how the Courts in England and India have applied it to different situations. Cheshire and Fifoot in their book on " Law of Contract ", 3rd Edn., observe at page " 280 thus: ' The public interests which is designed to protect are so comprehensive and heterogeneous, and opinions as to what is injurious must of necessity vary so greatly with the social and moral convictions, and at times even with the political views, of different judges, that it forms a treacherous and unstable (1) 433 ground for legal decision These questions have agitated the Courts in the past, but the present state of the law would appear to be reasonably clear. Two observations may be made with some degree of assurance. First, although the rules already established by precedent must be moulded to fit the new conditions of a changing world, it is no longer legitimate for the Courts to invent a new head of public policy. A judge is not free to speculate upon what, in his opinion, is for the good of the community. He must be content to apply, either directly or by way of analogy, the ' principles laid down in previous decisions. He must expound, not expand, this particular branch of the law. Secondly, even though the contract is one which prima facie falls under one of the recognized heads of public policy, it will not be held illegal unless its harmful qualities are indisputable. The doctrine, as Lord Atkin remarked in a leading case, " should only be invoked in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds . . In popular language . the contract should be given the benefit of the doubt ". " Anson in his Law of Contract states the same rule thus, at p. 216: "Jessel, M. R., in 1875, stated a principle which is still valid for the Courts, when he said: ' You have this paramount public policy to consider, that you are not lightly to interfere with the freedom of contract '; and it is in reconciling freedom of contract with other public interests which are regarded as of not less importance that the difficulty in these cases arises. . We may say, however, that the policy of the law has, on certain subjects, been worked into a set of tolerably definite rules. The application of these to particular instances necessarily varies with the conditions of the times and the progressive development of public opinion and morality, but, as Lord Wright has said public policy, like any other branch of the Common Law, ought to be, and I think is, governed by 55 434 the judicial use of precedents. If it is said that rules of public policy have to be moulded to suit new conditions of a changing world, that is true; but the same is true of the principles of the Common Law generally. " In Halsbury 's Laws of England, 3rd Edn., Vol. 8, the doctrine is stated at p. 130 thus: " Any agreement which tends to be injurious to the public or against the public good is void as being contrary to public policy. . . . It seems, however, that this branch of the law will not be extended. The determination of what is contrary to the so called policy of the law necessarily varies from time to time. Many transactions are upheld now which in a former generation would have been avoided as contrary to the supposed policy of the law. The rule remains, but its application varies with the principles which for the time being guide public opinion. " A few of the leading cases on the subject reflected in the authoritative statements 'of law by the various authors may also be useful to demarcate the limits of this illusive concept. Parke, B., in Egerton vs Brownlow(1), which is a leading judgment on the subject, describes the doctrine of public policy thus at p. 123: " 'I Public policy ' is a vague and unsatisfactory term, and calculated to lead to uncertainty and error, when applied to the decision of legal rights; it is capable of being understood in different senses; it may, and does, in its ordinary sense, mean I political expedience ', or that which is best for the common good of the community; and in that sense there may be every variety of opinion, according to education, habits, talents, and dispositions of each person, who is to decide whether an act is against public policy or not. To allow this to be a ground of judicial decision, would lead to the greatest uncertainty and confusion. It is the province of the statesman, and not the lawyer, to discuss, and of the Legislature to determine, what is best for the public good, and to provide for it by proper enactments. It 1s the province of the judge (1) ; , 123; ; ,408. 435 to expound the law only; the written from the statutes; the unwritten or common law from the decisions of our predecessors and of our existing Courts, from text writers of acknowledged authority, and upon the principles to be clearly deduced from them by sound reason and just inference; not to speculate upon what is the best, in his opinion, for the advantage of the community. Some of these decisions may have no doubt been founded upon the prevailing and just opinions of the public good ; for instance, the illegality of covenants in restraint of marriage or trade. They have become a part of the recognised law, and we are therefore bound by them, but we are not thereby authorised to establish as law everything which we may think for the public good, and prohibit everything which we think otherwise. " In Janson vs Driefontein Consolidated Mines, Ltd.(1) an action raised against British underwriters in respect of insurance of treasures against capture during its transit from a foreign state to Great Britain was resisted by the underwriters on the ground that the insurance was against public policy. The House of Lords rejected the plea. Earl of Halsbury, L.C., in his speech made weighty observations, which may usefully be extracted. The learned Lord says at page 491: In treating of various branches of the law learned persons have analysed the sources of the law, and have sometimes expressed their opinion that such and such a provision is bad because it is contrary to public policy; but I deny that any Court can invent a new head of public policy ; so a contract for marriage brokerage, the creation of a perpetuity, a contract in restraint of trade, a gaming or wagering contract, or, what is relevant here, the assisting of the King 's enemies, are all undoubtedly unlawful things; and you may say that it is because they are contrary to public policy they are unlawful; but it is because these things have been either enacted or assumed to be by the common law unlawful, and not because a judge or Court have a right to declare that such and such (1) 436 things are in his or their view contrary to public policy. Of course, in the application of the principles here insisted on, it is inevitable that the particular case must be decided by a judge; he must find the facts, and he must decide whether the facts so found do or do not come within the principles which I have endeavoured to describe that is, a principle of public policy, recognised by the law, which the suggested contract is infringing, or is supposed to infringe. " These observations indicate that the doctrine of public policy is only a branch of common law and unless the principle of public policy is recognised by that law, Court cannot apply it to invalidate a contract. Lord Lindley in his speech at p. 507 pointed out that public policy is a very unstable and dangerous foundation on which to build until made safe by decision. A promise made by one spouse, after a decree nisi for the dissolution of the marriage has been pronounced, to marry a third person after the decree has been made absolute is not void as being against public policy: see Fender vs St. John Mildmay (1). In that case Lord Atkin states the scope of the doctrine thus at p. 12: " In popular language, following the wise aphorism of Sir George Jessel cited above, the contract should be given the benefit of the doubt. But there is no doubt that the rule exists. In cases where the promise to do something contrary to public policy which for short I will call a harmful thing, or where the consideration for the promise is the doing or the promise to do a harmful thing a judge, though he is on slippery ground, at any rate has a chance of finding a footing. . But the doctrine does not extend only to harmful acts, it has to be applied to harmful tendencies. Here the ground is still less safe and more treacherous ". Adverting to the observation of Lord Halsbury in Janson vs Driefontein Consolidated Mines Ltd. Lord Atkin commented thus, at page 11: ". . . Lord Halsbury indeed appeared to decide that the categories of public policy are closed, (1) (2) 437 and that the principle could not be invoked anew unless the case could be brought within some principle of public policy already recognised by the law. I do not find, however, that this view received the express assent of the other members of the House; and it seems to me, with respect, too rigid. On the other hand, it fortifies the serious warning illustrated by the passages cited above that the doctrine should only be invoked in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds ". Lord Thankerton summarised his view in the following terms, at p. 23: " In the first place, there can be little question as to the proper function of the Courts, in questions of public policy. Their duty is to expound, and not to expand, such policy. Thai does not mean that they are precluded from applying ail existing principle of public policy to a new set of circumstances, where such circumstances are clearly within the scope of the policy. Such a case might well arise in the case of safety of the State, for instance. But no such case is suggested here. Further, the Courts must be watchful not to be influenced by their view of what the principle of public policy, or its limits, should be ". Lord Wright, at p. 38, explains the two senses in which the words " public policy" are used : " In one sense every rule of law, either common law or equity, which has been laid down by the Courts, in that course of judicial legislation which has evolved the law of this country, has been based on considerations of public interest or policy. In that, sense Sir George Jessel, M. R., referred to the paramount public policy that people should fulfil their contracts. But public policy in the narrower sense means that there are considerations of public interest which require the Courts to depart from their primary function of enforcing contracts, and exceptionally to refuse to enforce them. Public policy in this sense is disabling 438 Then the noble Lord proceeds to lay down the following principles on which a judge should exercise this peculiar and exceptional jurisdiction: (1) It is clear that public policy is not a branch of law to be extended ; (2) it is the province of the judge to expound the law only; (3) public policy, like any other branch of the common law, is governed by the judicial use of precedents ; and (4) Courts apply some recognised principles to the new conditions, proceeding by way of analogy and according to logic and convenience, just as Courts deal with any other rule of the common law. The learned Lord on the basis of the discussion of case law on the subject observes at p. 40: " It is true that it has been observed that certain rules of public policy have to be moulded to suit now conditions of a changing world : but that is true of the principles of common law generally. I find it difficult to conceive that in these days any new head of public policy could be discovered ". The observations of the aforesaid Law Lords define the concept of public policy and lay down the limits of its application in the modern times. In short, they state that the rules of public policy are ' well settled and the function of the Courts is only to expound them and apply them to varying situations. While Lord Atkin does not accept Lord Halsbury 's dictum that the categories of public policy are closed, he gives a warning that the doctrine should be invoked only in clear cases in which the harm to the public is substantially incontestable, Lord Thankerton and Lord Wright seem to suggest that the categories of public policy are well settled and what the Courts at best can do is only to apply the same to new set of circumstances. Neither of them excludes the possibility of evolving a new bead of public policy in a changing world, but they could not conceive that under the existing circumstances any such head could be discovered. Asquith, L. J., in Monkland vs Jack Barclay Ltd. (1) restated the law crisply at p. 723: "The Courts have again and again said, that where a contract does not fit into one or other of these (1) 439 pigeon holes but lies outside this charmed circle, the courts should use extreme reserve in holding a contract to be void as against public policy, and should only do so when the contract is incontestably and on any view inimical to the public interest ". The Indian cases also adopt the same view. A division bench of the Bombay High Court in Shrinivas Das Lakshminarayan vs Ram Chandra Ramrattandas observed at p. 20: " It is no doubt open to the Court to hold that the consideration or object of an agreement is unlawful on the ground that it is opposed to what the Court regards as public policy. This is laid down in section 23 of the and in India therefore it cannot be affirmed as a matter of law as was affirmed by Lord Halsbury in Janson vs Driefontein Consolidated Mines, Limited at p. 491) that no Court can invent a new head of public policy, but the dictum of Lord Davey in the same case that " public policy is always an unsafe and treacherous ground for legal decision " may be accepted as a sound cautionary maxim in considering the reasons assigned by the learned Judge for his decision ". The same view is confirmed in Bhagwant Genuji Girme vs Gangabisan Ramgopal (2) and Gopi Tihadi vs Gokhei Panda (3). The doctrine of public policy may be summarized thus: Public policy or the policy of the law is an illusive concept; it has been described as " untrustworthy guide ", " variable quality ", " uncertain one ", " unruly horse ", etc. ; the primary duty of a Court of Law is to enforce a promise which the parties have made and to uphold the sanctity of contracts which form the basis of society, but in certain cases, the Court may relieve them of their duty on a rule founded on what is called the public policy; for want of better words Lord Atkin describes that something done contrary to public policy is a harmful thing, but the doctrine is extended not only to harmful cases but also to harmful tendencies; this doctrine of public policy is only a branch of common law, and, (1) I.L.R. (2) I.L.R. 1941 Bom 71. (3) I.L.R. 1953 Cuttack 558. 440 just like any other branch of common law, it is governed by precedents; the principles have been crystallized under different heads and though it is permissible for Courts to expound and apply them to different situations, it should only be invoked in clear and incontestable cases of harm to the public; though the heads are not closed and though theoretically it may be permissible to evolve a new head under exceptional circumstances of a changing world, it is advisable in the interest of stability of society not to make any attempt to discover new heads in these days. This leads us to the question whether in England or in India a definite principle of public policy has been evolved or recognized invalidating wagers. So far as England is concerned, the passages from text books extracted and the decisions discussed in connection with the first point clearly establish that there has never been such a rule of public policy in that country. Courts under the common law ' of England till the year 1845 enforced such contracts even between parties to the transaction. They held that wagers were not illegal. After the passing of the English Gaming Act, 1845 (8 & 9 Vict. c. 109), such contracts were declared void. Even so; the Courts held that though a wagering contract was void, it was not illegal and therefore an agreement collateral to the wagering contract could be enforced. Only after the enactment of the Gaming Act, 1892 (55 Vict. c. 9), the collateral contracts also became unenforceable by reason of the express words of that Act. Indeed, in some of the decisions cited supra the question of public policy was specifically raised and negatived by Courts: See Thacker vs Hardy (1); Hyams vs Stuart King (2) ; and Michael Jeffrey & Company vs Bamford (3). It is therefore abundantly clear that the common law of England did not recognize any principle of public policy declaring wagering contracts illegal. The legal position is the same in India. The Indian Courts, both before and after the passing of the Act (1) (2) (3) 441 21 of 1848 and also after the enactment of the Contract Act, have held that the wagering contracts are not illegal and the collateral contracts in respect of GI. them are enforceable. We have already referred to these in dealing with the first point and we need not A,, cover the ground once again, except to cite a passage from the decision of the Judicial Committee in Ramloll Thackoorseydass vs Soojumnull Dhondmull (1), which is directly in point. Their Lordships in considering the applicability of the doctrine of public policy to a wagering contract observed at p. 350: " We are of opinion, that, although, to a certain degree, it might create a temptation to do what was wrong, we are not to presume that the parties would commit a crime; and as it did not interfere with the performance of any duty, and as if the parties were not induced by it to commit a crime, neither the interests of individuals or of the Government could be affected by it, we cannot say that it is contrary to public policy. " There is not a single decision after the above cited case, which was decided in 1848, up to the present day wherein the Courts either declared wagering contracts as illegal or refused to enforce any collateral contract in respect of such wagers, on the ground of public policy. It may, therefore, be stated without any contradiction that the common law of England in respect of wagers was followed in India and it has always been held that such contracts, though void after the Act of 1848, were not illegal. Nor the legislatures of the States excepting Bombay made any attempt to bring the law in India in line with that obtaining in England after the Gaming Act, 1892. The Contract Act was passed in the year 1872. At the time of the passing of the Contract Act, there was a Central Act, Act 21 of 1848, principally based on the English Gaming Act, 1845. There was also the Bombay Wagers (Amendment) Act, 1865, amending the former Act in terms analogous to those later enacted by the Gaming Act, 1892. Though the Contract (1) (1848) 4 M.I.A. 339. 56 442 Act repealed the Act 21 of 1848, it did not incorporate in it the provisions similar to those of the Bombay Act; nor was any amendment made subsequent to the passing of the English Gaming Act, 1892. The legislature must be deemed to have had the knowledge of the state of law in England, and, therefore, we may assume that it did not think fit to make wagers illegal or to hit at collateral contracts. The policy of law in India has therefore been to sustain the legality of wagers. The history of the law of gambling in India would also show that though gaming in certain respects was controlled, it has never been absolutely prohibited. The following are some of the gambling Acts in India: The Public Gambling Act (111 of 1867); The Bengal Public Gambling Act (11 of 1867); The Bombay Prevention of Gambling Act (IV of 1887); Madhya Bharat Gambling Act(LI of 1949); Madhya Pradesh Public Gambling Act; Madras Gaming Act (111 of 1930); The Orissa Prevention of Gambling Act (XVII of 1955); the Punjab Public Gambling Act (111 of 1867); the Rajasthan Public Gambling Ordinance (Ordinance XLVIII of 1949) and the U.P. Public Gambling Act. These Acts do not prohibit gaming in its entirety, but aim at suppressing gaming in private houses when carried on for profit or gain of the owner or occupier thereof and also gaming in public. Gaming without contravening the provisions of the said Acts is legal. Wherever the State intended to declare a particular form of gaming illegal, it made "an express statute to that effect: See section 29 A of the Indian Penal Code. In other respects, gaming and wagering are allowed in India. It is also common knowledge that horse races are allowed throughout India and the State also derives revenue therefrom. The next question posed by the learned Counsel for the appellant is whether under the Hindu Law it can be said that gambling contracts are held to be illegal. The learned Counsel relies upon the observations of this Court in The State of Bombay vs R. M. D. Chamarbaugwala (1). The question raised in that case was (1) ; 443 whether the Bombay Lotteries and Prize ' Competition Control and Tax (Amendment) Act of 1952 extending the definition of " prize competition " contained in section 2(1)(d) of the Bombay Lotteries and Prize Competition Control and Tax Act of 1948, so as to include prize competition carried on through newspapers printed and published outside the State, was constitutionally valid, It was contended, inter alia, that the Act offended the fundamental right of the respondents, who were conducting prize competitions, under article 19(1) (g) of the Constitution and also violated the freedom of inter State trade under article 301 thereof This Court held that the gambling activities in their very nature and essence were extra commercium and could not either be trade or commerce within the meaning of the aforesaid provisions and therefore neither the fundamental right of the respondents under article 19(1)(g) or their right to freedom of interState trade under article 301 is violated. In that context Das, C. J., has collected all the Hindu Law texts from Rig Veda, Mahabharata, Manu, Brihaspati, Yagnavalkya, etc., at pp. 922 923. It is unnecessary to restate them here, but it is clear from those texts that Hindu sacred books condemned gambling in unambiguous terms. But the question is whether those ancient text books remain only as pious wishes of our ancestors or whether they were enforced in the recent centu ries. All the branches of the Hindu Law have not been administered by Courts in India; only questions regarding succession, inheritance, marriage, and religious usages and institutions are decided according to the Hindu Law, except in so far as such law has been altered by legislative enactment. Besides the matters above referred to, there are certain additional matters to which the Hindu Law is applied to the Hindus, in some cases by virtue of express legislation and in others on the principle of justice, equity and good conscience. These matters are adoption, guardianship, family relations, wills, gifts and partition. As to these matters also the Hindu Law is to be applied subject to such alterations as have been made by legislative enactments: See Mulla 's Hindu Law, para. 444 3, p. 2. In other respects the ancient Hindu Law was not enforced in Indian Courts and it may be said that they became obsolete. Admittedly there, has not been a single instance in recorded cases holding gambling or wagering contracts illegal on the ground that they are contrary to public policy as they offended the principles of ancient Hindu Law. In the circumstances, we find it difficult to import the tenets of Hindu Law to give a novel content to the doctrine of public policy in respect of contracts of gaming and wagering. To summarize: The common law of England and that of India have never struck down contracts of wager on the ground of public policy ; indeed they have always been held to be not illegal notwithstanding the fact that the statute declared them void. Even after the contracts of wager were declared to be void in England, collateral contracts were enforced till the passing of the Gamina Act of 1892, and in India, except in the State of Bombay, they have been enforced even after the passing of the Act 21 of 1848, which was substituted by section 30 of the Contract Act. The moral prohibitions in Hindu Law texts against gambling were not only not legally enforced but were allowed to fall into desuetude. In practice, though gambling is controlled in specific matters, it has not been declared illegal and there is no law declaring wagering illegal. Indeed, some of the gambling practices are a perennial source of income to the State. In the circumstances it is not possible to hold that there is any definite head or principle of public policy evolved by Courts or laid down by precedents which would directly apply to wagering contracts. Even if it is permissible for Courts to evolve a new head of public policy under extraordinary circumstances giving rise to incontestable harm to the society, we cannot say that wager is one of such instances of exceptional gravity, for it has been recognized for centuries and has been tolerated by the public and the State alike. If it has any such tendency, it is for the legislature to make a law prohibiting such contracts and declaring them illegal and not for this Court to resort to judicial legislation. 445 Re. Point 3 Immorality: The argument under this head is rather broadly stated by the learned Counsel for the appellant. The learned counsel attempts to draw an analogy from the Hindu Law relating to the doctrine of pious obligation of sons to discharge their father 's debts and contends that what the Hindu Law considers to be immoral in that context may appropriately be applied to a case under section 23 of the Contract Act. Neither any authority is cited nor any legal basis is suggested for importing the doctrine of Hindu Law into the domain of contracts. Section 23 of the Contract Act is inspired by the common law of England and it would be more useful to refer to the English Law than to the Hindu Law texts dealing with a different matter. Anson in his Law Of Contracts states at p. 222 thus : " The only aspect of immorality with which Court of Law have dealt is sexual immorality. . . " Halsbury in his Laws of England, 3rd Edn., Vol. makes a similar statement, at p. 138: " A contract which is made upon an immoral consideration or for an immoral purpose is unenforceable and there is no distinction in this respect between immoral and illegal contracts. The immorality here alluded to is sexual immorality. " In the Law of Contract by Cheshire and Fifoot, 3rd Edn., it is stated at p. 279: " Although Lord Mansfield laid it down that a contract contra bonos mores is illegal, the law in this connection gives no extended meaning to morality but concerns itself only with what is sexually reprehensible." In the book on the by Pollock and Mulla it is stated at p. 157: " The epithet " immoral " points, in legal usage, to conduct or purposes which the State, though disapproving them, is unable, or not advised, to visit with direct punishment." The learned authors confined its operation to acts which are considered to be immoral according to the standards of immorality approved by Courts. The case law both in England and India confines the operation of the doctrine to sexual immorality. To cite 446 Only some instances: settlements in consideration of encubinage, contracts of sale or hire of things to be used in a brothel or by a prostitute for purposes incidental to her profession, agreements to pay money for future illicit cohabitation, promises in regard to marriage for consideration, or contracts facilitating divorce are all held to be void on the ground that the object is immoral. The word " immoral " is a very comprehensive word. ordinarily it takes in every aspect of personal conduct deviating from the standard norms of life. It may also be said that what is repugnant to good conscience is immoral. Its varying content depends upon time, place and the stage of civilization of a particular society. In short, no universal standard can be laid down and any law based on such fluid concept defeats its own purpose. The provisions of section 23 of the Contract Act indicate the legislative intention to give it a restricted meaning. Its juxtaposition with an equally illusive concept, public policy, indicates that it is used in a restricted sense; otherwise there would be overlapping of the two concepts. In its wide sense what is immoral may be against public policy, 'for public policy covers political, social and economic ground of objection. Decided cases and authoritative text book ' writers, therefore, confined it, with every justification, only to sexual immorality. The other limitation imposed on the word by the statute, namely, " the court regards it as immoral ", brings out the idea that it is also a branch of the common law like the doctrine of public policy, and, therefore, should be confined to the Principles recognized and settled by Courts. Precedents confine the said concept only to sexual immora lity and no case has been brought to our notice where it has been applied to any head other than sexual immorality. In the circumstances, we cannot evolve a new head so as to bring in wagers within its fold. Lastly it is contended by the learned Counsel for the appellant that wager is extra commercium and therefore there cannot be in law partnership for wager within the meaning of section 4 of the Partnership Act; for partnership under that section is relationship between 447 persons who have agreed to share the profits of a business. Reliance is placed in respect of this contention on the decision of this Court in The State of Bombay vs R. M. D. Chamarbaugwala (1). This question was not raised in the pleadings. No issue was framed in respect of it. No such case was argued before the learned Subordinate Judge or in the High Court; nor was this point raised in the application for certificate for leave to appeal to the Supreme Court filed in the High Court. Indeed, the learned Advocate appearing for the appellant in the High Court stated that his client intended to raise one question only, namely, whether the partnership formed for the purpose of carrying on a business in differences was illegal within the meaning of section 23 of the Contract Act. Further this plea was not specifically disclosed in the statement of case filed by the appellant in this Court. If this contention had been raised at the earliest point of time, it would have been open to the respondents to ask for a suitable amendment of the plaint to sustain their claim. In the circumstances, we do not think that we could with justification allow the appellant to raise this new plea for the first time before us, as it would cause irreparable prejudice to the respondents. We express no opinion on this point. For the foregoing reasons we must hold that the suit partnership was not unlawful within the meaning of section 23 of the . In the result, the appeal fails and is dismissed with costs. Appeal dismissed.

The question for determination in this appeal was whether an agreement of partnership with the object of entering into wagering transactions was illegal within the meaning of section 23 Of the Indian Contract Act. The appellant and the respondent No. 1 entered into a partnership with the object of entering into forward contracts for the purchase and sale of wheat with two other firms and the agreement between them was that the respondent would enter into the contracts on behalf of the partnership and the profit or loss would be shared by the parties equally. The transactions resulted in loss and the respondent paid the entire amount due to the third parties. On the appellant denying his liability for the half of the loss, the respondent sued him for the recovery of the same and his defence, inter alia, was that the agreement to enter into the wagering contracts was unlawful under section 23 Of the Contract Act. The trial Court dismissed the suit. The High Court on appeal held that though the wagering contracts were void under section 30 Of the Indian Contract Act, the object of the partnership was not unlawful within the meaning of the Act and decreed the suit. It was contended on behalf of the appellant (1) that a wagering contract being void under section 30 Of the Contract Act, was also forbidden by law within the 407 meaning of S.23 Of the Act, that (2) the concept of public policy was very comprehensive in India since the independence, and such a contract would be against public Policy, (3) that wagering contracts were illegal under the Hindu Law and (4) that they were immoral, tested by the Hindu Law doctrine of pious obligation of sons to discharge the father 's debts. Held, that the contentions raised were unsustainable in law and must be negatived. Although a wagering contract was void and unenforceable under section 30 Of the Contract Act, it was not forbidden by law and an agreement collateral to such a contract was not unlawful within the meaning of section 23 Of the Contract Act. A partnership with the object of carrying on wagering transactions was not, therefore, hit by that section. Pringle vs Jafer Khan, All. 443, Shibho Mal vs Lachman Das, All. 165, Beni Madho Das vs Kaunsal Kishor Dhusar, All. 452, Md. Gulam Mustafakhan vs Padamsi, A.I.R. (1923) Nag. 48, approved. ThacKer vs Hardy, , Read vs Anderson, , Bridger vs Savage, , Hyams vs Stuart King, , Thwaites vs Coulthwaite, , Brookman vs Mather, and Jaffrey & Co. vs Bamford, (1921) 2 K.B. 351, Ramloll Thackoorseydass vs Soojumnull Dhondmull, (1848) 4 M.l.A. 339, Doolubdas Pettamberdass vs Ramloll Thackoorseydass and Ors. (1850) 5 M.I.A. 109, Raghoonauth Shoi Chotayloll vs Manickchund and Kaisreechund, (1856) 6 M.I.A. 251, referred to. Hill vs William Hill, , considered. The doctrine of public policy was only a branch of the com mon law and just like its any other branch, it was governed by precedents ; its principles had been crystallised under different heads and though it was permissible to expound and apply them to different situations, it could be applied only to clear and undeniable cases of harm to the public. Although theoretically it was permissible to evolve a new head of public policy in exceptional cirumstances, such a course would be inadvisable in the interest of stability of society. Shrinivas Das Lakshminarayan vs Ram Chandra Ramrattandas, I.L.R. , Bhagwanti Genuji Girme vs Gangabisan Ramgopal, I.L.R. , and Gopi Tihadi vs Gokhei Panda, I.L.R. 1953 Cuttack 558, approved. Egerton vs Brownlow, ; ; , Janson vs Driefontein Consolidated Mines, Ltd., , Fender vs St. John Mildmay, (1938) A.C. :1 and Monkland vs Jack Barclay Ltd., , referred to. Like the common law of England, which did not recognise any principle of public policy declaring wagering contracts illegal, the Indian Courts, both before and after the passing of Of 1848 and also after the enactment of the , held that wagering contracts were not illegal as being contrary to public policy and collateral contracts in respect of them were enforceable in law. Ramloll Thackoorseydass vs Soojumnull Dhondmull, (1848) 4 M.I.A. 339, referred to. Gambling or wagering contracts were never declared to be illegal by courts in India as being contrary to public policy as offending the principles of ancient Hindu Law and it was not possible to give a novel content to that doctrine in respect of gaming and wagering contracts. The State of Bombay vs R. M. D. Chamaybaugwala, ; , considered. The common law of England and that of India never struck down contracts of wager on the ground of public policy and such contracts had always been held not to be illegal although the statute declared them to be void. The moral prohibitions in Hindu Law texts against gambling were not legally enforced but were allowed to fall into desuetude and it was not possible to hold that there was any definite head or principle of public policy evolved by courts or laid down by precedents directly applicable to wagering contracts. There was neither any authority nor any legal basis for importing the doctrine of Hindu Law relating to the pious obligation of sons to pay the father 's debt into the dominion of ' contracts. Section 23 Of the Contract Act was inspired by the common law of England and should be construed in that light. ' The word " immoral " was very comprehensive and varying in its contents and no universal standard could be laid down. Any law, therefore, based on such fluid concept would defeat its purpose. The provisions of section 23 of the indicated that the Legislature intended to give that word a restricted meaning. The limitation imposed on it by the expression " the Court regards it as immoral " clearly indicated that it was also a branch of the common law and should, therefore, be confined to principles recognised and settled by courts. judicial decisions confined it to sexual immorality, and wager could not be brought in as new head within its fold.

l Appeal No. 1972 of 1983 From the Judgment and Order dated 22.11.83 of the Calcutta High Court in Civil Rule No. 10933 W of 1983 and order issuing contempt notice dated 3.2.84 being Civil Rule No. 571 W of 1984. Milon K. Banerjee, Additional Solicitor General, A.K. Ganguli and R.N. Poddar for the appellants. Soli J. Sorabjee, Mrs. Manik Karanjawala, Ratan Karanjawala, Kuldeep Pablay, Sumit Kachawha and Dr. Roxana Swamy for the respondents. A.Subba Rao for STC. The Order of the Court was delivered by CHINNAPPA REDDY J. We grant special leave and proceed to dispose of the appeal. M/S. Oswal Woollen Mills Limited having its registered office at Ludhiana in the State of Punjab and a branch office at Calcutta, and Narayan Das Jain, Secretary of the Company have filed a writ petition in the Calcutta High Court seeking various reliefs against the Union of India (through the Secretary, Ministry of Commerce, New Delhi), the Chief Controller of Imports and Exports, New Delhi, the Deputy Chief Controller of Imports and Exports, Amritsar, the Collector of Customs, Calcutta and the State Trading Corporation of India, New Delhi. The primary prayer in the writ petition is to prevent or to quash an apprehended or purported action under clause 8 B of the Import Control Order. All the other reliefs sought in the writ petition revolve round the principal relief regarding clause 8 B of the Import Control Order. The other prayers are either ancillary or incidental to the principal prayer or are of an interlocutory character. Having regard to the fact that the registered office of the company is at Ludhiana and the principal respondents against whom the primary relief is sought are at New Delhi, one would have expected the writ petition to be filed either in the High Court of Punjab and Haryana or in the Delhi High Court. The writ petitioners however have chosen the Calcutta High Court as the forum perhaps because one of the interlocutory reliefs which is sought is in respect of a consignment of beef tallow which has arrived at the 345 Calcutta Port. An inevitable result of the filing of writ petitions elsewhere than at the place where the concerned offices and the relevant records are located is to delay prompt return and contests We do not desire to probe further into the question whether the writ petition was filed by design or accident in the Calcutta High Court when the office of the Company is in the State of Punjab and all the principal respondents are in Delhi. But we do feel disturbed that such writ petitions are often deliberately filed in distant High Courts, as part of a manoeuvre in a legal battle, so as to render it difficult for the officials at Delhi to move applications to vacate stay where it becomes necessary to file such applications. More about this later. It appears that an order under clause 8 B of the Import Control Order had been made against the company on November 9, 1983, but the writ petition was filed as if the order was in the offing and might be made at any time. The writ petition was apparently filed in professed or real ignorance of the order made under clause 8 B of the Import Control Order. On November 22, 1983, a learned single judge of the Calcutta High Court issued a rule Nisi and granted an interim order in the following terms. "There will be an interim order of stay/injunction in terms of prayers (j), (k), (I) and (n) of the writ petition till the disposal of the rule. Liberty is given to the respondents to apply for vacation or variation". The rule was made returnable on January 31, 1984. Prayers (j),(k)(I) and (n) of the petition were for the grant of: "(J) Injuction restraining the respondents their servants and/or agents from filing any criminal complaint against the petitioners or any of its director or employees from initiating any departmental proceedings under the Import and Export (Control) Act, 1947 and Import (Control) Order, 1955 against the petitioners or any of its Directors of Employees till the disposal of the Rule; (k) Injuction restraining the respondents from issuing an order of abeyance under clause 8 B of the Import Control 346 Order, 1955 and/or from taking any action under such order of abeyance till the disposal of the rule; (1) Mandatory order directing the respondent No.5 Collector of Customs to permit the petitioners to re export the consignment of inedible Beef Tallow in terms of I.T.G. Public Notice No.37 of 1983 dated 1.9.83 with respect to the consignment weighing 456.316 MT which is lying at Calcutta under section 49 of the Customs Act; (n) An order that pending the hearing and final disposal of this writ petition the petitioners be permitted to re ship and/or re export the consignment of 456.216 MT of inedible Beef Tallow which arrived at Calcutta as more particularly mentioned in Annexure `I." It is obvious that the interim order is of a drastic character with a great potential for mischief. The Principal prayer in the writ petition is the challenge to the order made or proposed to be made under clause 8 B of the Import Control order. The interim order in terms of prayers (j) and (k) has the effect of practically allowing the writ petition at the stage of admission without hearing the opposite parties. While we do not wish to say that a drastic interim order may never be passed without hearing the opposite parties even if the circumstances justify it, we are very firmly of the opinion that a statutory order such as the one made in the present case under clause 8 B of the Import Control order ought not to have been stayed without at least hearing those that made the order. Such a stay may lead to devastating consequences leaving no way of undoing, the mischief Where a plenitude of power is given under a statute, designed to meet a dire situation, it is no answer to say that the very nature of the power and the consequences which may ensure is itself a sufficient justification for the grant of a stay of that order, unless, of course, there are sufficient circumstances to justify a strong prima facie inference that the order was made in abuse of the power conferred by the statute. A statutory order such as the one under clause 8 B purports to be made in the public interest and unless there are even stronger grounds of public interest an exparte interim order will not be justified. The only appropriate order to make in such cases is to issue notice of the respondents and make it returnable within a short period. This should particularly be so where the offices of the principal respondents and relevant records lie outside 347 the ordinary jurisdiction of the court. To grant interim relief straight away and leave it to the respondents to move the court to vacate the interim order may jeopardise the public interest. It is notorious how if an interim order is once made by a court, parties employ every device and tactic to ward off the final hearing of the application. It is, therefore, necessary for the courts to be circumspect in the matter of granting interim relief, more particularly so where the interim relief is directed against orders or actions of public officials acting, in discharge of their public duty and in exercise of statutory powers. On the facts and circumstances of the present case, we are satisfied that no interim relief should have been granted by the High Court in the terms in which it was done. Orders under clause 8 B of the Import Control order, similar to the one made against Oswal Woollen Mills Limited, were made against various import export houses and others. Some of these orders have been questioned by the affected parties in different High Courts and, in some cases, interim orders have also been obtained. One such writ petition filed by Liberty Oil Mills Pvt. Limited has been transferred to this court from the Bombay High Court at the instance of the Union of India. The case is now pending in this Court and has in fact been heard in part by this vary Bench. Apparently, under the impression that the questions at issue will be finally determined by this court in the case of the Liberty oil Mills, the Union of India and the other authorities do not seem to have moved expeditiously to contest the writ petitions filed in the High Courts and to have the interim orders vacated. In the present case, an application to vacate the interim order was filed in the Calcutta High Court on February 1, 1984. In the meanwhile, oswal Woollen Mills Limited went on writing letters and sending telegrams complaining that the interim orders of the High Court had not been obeyed and threatening action for contempt of Court. On January 6, 1984, an application to commit the Chief Controller of Imports and Exports and others for contempt of court was filed by the company. Notice to the respondents was ordered on the same day and on February 3, 1984, overruling the request made on behalf of the respondents that the petition to vacate the interim order may be heard first, the High Court issued a rule in the application for contempt of court against the Chief Controller of Imports & Exports and the Deputy Chief Controller of Imports and Exports and directed them to appear in person on March 6, 1984, Thereupon the Union of India, the Chief Controller of Imports & Exports, etc. 348 have filed the present special leave petition against the interim order dated November 22, 1983 of the Calcutta High Court in Civil Rule No.10933 W of 1983 and the rule for contempt of court issued on February 3, 1984 in Civil Rule No. 571 W of 1984. We have heard Shri Milon Banerjee, learned Additional Solicitor General for the petitioners and Shri Soli Sorabjee, learned senior Advocate for the respondents. We have already mentioned that the High Court was not right in granting interim relief in the terms in which it had done so. We, therefore, vacate the interim order dated November 22, 1983 made by the Calcutta High Court. It has been pointed out to us that the Chief Controller of Imports & Exports has himself issued a Public Notice dated 1st September, 1983 permitting re shipment/re export of import consignment which could not be cleared consequent upon the Ministry of Commerce Import Trade Control order No 27/83 dated the 24th August, 1983. The Public Notice empowers the customs authority to allow re shipment/re export having regard to the extent to which foreign exchange spent on import will be earned back and subject to such other conditions relating thereto as the Customs authority may impose. We wish to make it clear that the vacating of the interim order will not disentitle the writ petitioners from seeking and taking advantage of the public notice dated September 1, 1983. In regard to the rule for contempt of court, we find it difficult to sustain the same. Though ordinarily we would have left the matter to be decided by the High Court, we think it unnecessary to do so in the present case having regard to the elaborate arguments addressed to us by both parties. The complaint of the writ petitioners in seeking the rule for contempt of court was that the authorities had not dealt with their applications for licences, etc. despite the `abeyance ' order having been stayed. It is obvious that the stay of the operation of the `abeyance ' order merely meant that the writ petitioners were entitled to have their applications disposed of by the concerned authorities. The High Court not having set any limit of time for the disposal of the applications, it was not for the writ petitioners to impose a time limit and demand that their applications should be disposed, of forthwith. If the writ petitioners were aggrieved by the failure of their authorities to dispose of their applications expeditiously, it was open to them to seek a further direction from the court to fixing a limit of time within which the 349 applications were to be disposed of. We fail to see how the Chief Controller of Imports & Exports or the Deputy Chief Controller of Imports & Exports could be said to have committed any contempt of court, even prima facie, by their mere failure to take action in the matter of the disposal of the applications of the writ petitions. In the circumstances, we perceive the application to commit the authorities for contempt of court to be a device to exact licences from them. We accordingly allow the appeal, vacate the interim order dated November 22, 1983 of the Calcutta High Court in Civil Rule No. 10933 W of 1983 and quash the rule for contempt of court issued on February 3, 1984 in Civil Rule No. 571 W of 1984. Before we part with the case, we may refer to a statement made by Shri J.P. Sharma, Deputy Chief Controller of Imports and Exports, New Delhi in the affidavit filed by him before us to the effect that `in the larger public interest Government was unable to obey the interim order and had taken the question to this Hon 'ble Court which is pending decision shortly '. Torn out of the context in which it was made, the unhappy language in which it has been expressed is suggestive of contumaciousness on the part of J.P. Sharma. However, he has filed further affidavits before us explaining the context in which the statement was made and expressing his unqualified regret. We accept his explanation and expression of regret. We are satisfied that Shri J.P. Sharma did not mean what the language employed by him suggested. However, we do wish to express our disapproval of the language employed which is certainly suggestive of contumaciousness. N.V.K. Appeal allowed.

The respondents filed a writ petition in the High Court of Calcutta against an order made under Clause 8 B of the Import Control order 1955, in respect of a consignment of beef tallow which arrived at the Calcutta Port. A Single Judge issued a rule and granted an interim order restraining the Union of India and the Chief Controller of Imports and Exports from filing any criminal complaint against the respondent firm or its Directors and also a direction to permit the respondents to re export the consignment of tallow. An application was made by the Union of India to vacate the interim order. In the meanwhile the respondents sent letters and telegrams to the department intimating that the interim order of the High Court had not been obeyed, and threatening action for contempt of Court. An application to commit the Chief Controller of Imports and Exports, and others for contempt of court was filed by the company. Over ruling the request made on behalf of the Department to vacate the interim order, the court issued a rule in the application for contempt and directed the Department officials to appear in person. Being aggrieved by the order, the Department filed a Special Leave Petition against the interim order and the rule for contempt. Allowing the appeal, vacating the interim order and quashing the rule for contempt of Court; ^ HELD: 1. Writ petitions are often deliberately filed in distant High Courts, as part of a manoeuvre in a legal battle, so as to render it difficult for 343 the officials at Delhi to move applications to vacate stay where it becomes necessary to file such applications. An inevitable result of the filing of writ petitions elsewhere than at the place where the concerned offices and the relevant records are located is to delay prompt return and contest. [345B C, A] In the instant case the writ petition was filed in the Calcutta High Court when the office of the company is in the State of Punjab and all the principal respondents are in Delhi. A statutory order such as the one under Clause 8 B of the Import Control Order purports to be made in the public interest and unless there are even stronger grounds of public interest an ex parte interim order will not be justified. The only appropriate order to make in such cases is to issue notice to the respondents and make it returnable within a short period. This should particularly be so where the offices of the principal respondents and relevant records lie outside the ordinary jurisdiction of the Court. To grant interim relief straight away and leave it to the respondents to have the interim order vacated may jeopardise the public interest. [346G 347A] 3. If an interim order is once made by a court, parties employ every device and tactic to ward off the final hearing of the application. It is therefore, necessary for the courts to be circumspect in the matter of granting interim relief, more particularly so where the interim relief is directed against. orders or actions of public officials acting in discharge of their public duty and in exercise of statutory powers. [347B] In the instant case, no interim relief should have been granted by the High Court. The interim order is of a drastic character with a great potential for mischief and has the effect of practically allowing the writ petition at the stage of admission without hearing the opposite parties. [347C, 346D] 4. The application to commit the authorities for contempt of court appears to be a device to exact licences from them. [349B] In the instant case, the stay of the operation of the 'abeyance ' order merely meant that the writ petitioners were entitled to have their applications disposed of by the concerned authorities. The High Court not having set any limit of time for the disposal of the applications, it was not for the writ petitioners to impose a time limit and demand that their applications should be disposed of forthwith. If the writ petitioners were aggrieved by the failure of the authorities to dispose of their applications expeditiously, it was open to them to seek a further direction from the court fixing a limit of time within which the applications were to be disposed of. [348G 349A] 344

Civil Appeal No. 965 of 1980 Appeal by special leave from the judgment dated the 28th November, 1979 of the Allahabad High Court in Civil Revision No.661 of 1977. Manoj Swarup & Miss Lalita Kohli for the Appellant. R. N. Sharma and N. N. Sharma for the Respondent. The Judgment of the Court was delivered by BALAKRISHNA ERADI, J. This appeal by special leave is against a judgment rendered by the First Additional District Judge, Bulandshahr, allowing a Revision Petition filed before him by the respondent herein. 333 The respondent is the owner of a shop building in Jahangirabad town which he had let out to the appellant on a month to month tenancy basis. A suit for ejectment was filed by the respondent in the Court of Small Causes (Civil Judge), Bulandshahr, praying for eviction of the appellant from the shop under Section 2() (2) (a) of the U. P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (for short, the Act) on the ground that the tenant was in arrears of rent for not less than four months commencing from April 9, 1972 and had failed to pay the same to the landlord within one month from the date of service upon him of a notice of demand (October 19, 1972). It was alleged in the plaint that the agreed rent of the shop was Rs. 100/ per month and that the tenant had kept the rent in arrears from April 9, 1972 onwards despite notice having been served on him on October 19, 1972 demanding payment of arrears of rent and determining the tenancy. The appellant (defendant) pleaded in defence that the rent was only Rs. 90/ per month, that he had not committed any default in payment of the same and hence the suit for ejectment was not maintainable. According to the defendant, after service of the notice of demand for payment of arrears of rent, the respondent had approached him with a request to stand surety for him for the payment of arrears of sales tax due by him for the realisation of which the Amin had come with a warrant for the arrest of the respondent and since the appellant had acceded, to the said request and stood surety for the respondent there could be no further question of any arrears of rent being outstanding as due by him to the respondent. The trial court held that the rent of the shop was Rs. 90/ per month, that it had been kept in arrears by the tenant from April 9, 1972 onwards and a default had been committed by the tenant in payment of arrears of rent of more than four months after the notice of demand. Notwithstanding the aforesaid finding that there had been such default committed by the tenant, the trial court took the view that the conduct of the plaintiff respondent in inducing the defendant to stand surety for him for the payment of sales tax arrears due by him constituted a waiver of the demand made in the notice for surrender of possession on the ground of arrears of rent made. On this reasoning, the trial court denied the plaintiff the relief of ejectment and decreed the suit only for recovery of arrears of rent. The respondent plaintiff carried the matter in revision before District Court, Bulandshahr. The learned District Judge found that 334 the plea of waiver had not been put forward by the defendant either in the written statement or in any other manner at any stage before the trial court and that the issue covering the question of waiver had been framed by the trial court of its own accord. The District Judge further found on the merits that no conduct amounting to waiver on the part of the plaintiff had been established by the evidence because even according to the case of the defendant himself, excepting for standing surety for the plaintiff, he had not actually made any payment on behalf of the plaintiff towards the sales tax dues since the plaintiff had specifically refused to make any endorsement in the Rent Deed adjusting the proposed payment of sales tax against the arrears of rent due by the defendant. Inasmuch as the trial court had found that the default in payment of the arrears of rent for a period exceeding four months had been committed by the defendant and it had denied a relief of ejectment only on the reasoning that there had been a waiver of the demand for eviction on the part of the plaintiff, the District Judge allowed the Revision Petition and granted the plaintiff a decree for ejectment under Section 20 (2) (a) of the Act. Thereafter, the appellant defendant took up the matter in further revision before the High Court under Section 115, Code of Civil Procedure. The High Court by its judgment dated November 28, 1979 confirmed the findings of the District Judge and dismissed the Revision Petition. The defendant thereupon approached this Court for the grant of special leave to appeal against the said judgment of the High Court. It would appear that, at the time of the preliminary hearing of the Special Leave Petition, the appellant realised that the Revision Petition filed by him before the High Court was not maintainable in law. Hence, this position was conceded by the appellant before a Bench which heard the Special Leave Petition and a request was made by the appellant for the grant of special leave to him to appeal against the judgment of the District Court. That request was granted by order of this Court dated April 23, 1980. This Civil Appeal is thus directed against the judgment of the District Judge. After hearing counsel on both sides, we are satisfied that the District Court was perfectly right in its view that there had not been any conduct on the part of the plaintiff which would constitute a waiver by him of the demand for surrender of possession made as 335 per the notice dated October 9, 1972 which was served on the tenant on October 19, 1972. As rightly observed by the District Court, the defendant had not put forward any plea of waiver in the written statement filed by him before the trial court and the absence of any specific pleading in that behalf, the trial court was not really called upon to go into the question of waiver. Further, it being the specific case put forward by the defendant himself that no amount whatever had been paid by the appellant defendant to the sales tax authorities on behalf of the plaintiff and that the respondent plaintiff was not agreeable to make any endorsement on the Rent Deed adjusting the proposed payment of sales tax against the arrears of rent, we fail to see how it can be said that there had been any waiver by the plaintiff respondent of the demand for surrender of possession already made by him as per the notice dated October 9, 1972. The finding rendered b)! the trial court that the effect of the notice had been effaced by the subsequent conduct on the part of the landlord which amounted to a waiver was manifestly illegal and perverse and it was rightly set aside by the District Judge. Before us, an additional point was sought to be raised by the appellant which had not been put forward by him either before the trial court or before the District Judge at the revisional stage. It was urged that on the date of first hearing of the suit the defendant had deposited into the trial court an amount of Rs. 1,980/ and hence he is entitled to the benefit of sub section (4) of Section 20 of the Act which empowers the Court to pass an order relieving the tenant against his liability for eviction on the ground mentioned in clause (a) of sub section (2) of the said Section. It is necessary in this context to reproduce clause (a) of sub section (2) and sub section (4) of Section 20 of the Act. They are in the following terms: "20 (2). . . . . . . (a) that the tenant is in arrears of rent for not less than four months, and has failed to pay the same to the landlord within one month from the date of service upon him of a notice of demand. (4) In any suit for eviction on the ground mentioned in clause (a) of sub section (2), if at the first hearing of the suit, the tenant unconditionally pays or tenders to the landlord the entire amount of rent and damages for use and occupation of the building due from him (such damages for 336 use and occupation being calculated at the same rate as rent) together with interest thereon at the rate of nine per cent per annum and the landlord 's costs of the suit in respect thereof, after deducting therefrom any amount already deposited by the tenant under sub section (I) of Section 30, the court may, in lieu of passing a decree for eviction on that ground, pass an order relieving the tenant against his liability for eviction on that ground: Provided that nothing in this sub section shall apply in relation to a tenant who or any member of whose family has built or has otherwise acquired in a vacant state, or has got vacated after acquisition, any residential building in the same city, municipality, notified area or town area. " The provisions of sub section (4) will get attracted only if the tenant has, at the first hearing of the suit, unconditionally paid or tendered to the landlord the entire amount of rent and damages for use and occupation of the building due from him together with interest thereon at the rate of nine per cent per annum and the landlord 's costs of the suit in respect thereof, after deducting therefrom any amount already deposited by him under sub section (I) of Section 30. There is absolutely no material available on the record to show that the alleged deposit of Rs. 1,980/ was made by the tenant on the first date of hearing itself and, what is more important, that the said deposit was made by way of an unconditional tender for payment to the landlord. The deposit in question is said to have been made by the appellant on January 25, 1974. It was only subsequent thereto that the appellant filed his written statement in the suit. It is noteworthy that one of the principal contentions raised by the appellant defendant in the written statement was that since he had stood surety for the landlord for arrears of sales tax, there was no default by him in the payment of rent. In the face of the said plea taken in the written statement, disputing the existence of any arrears of rent and denying that there had been a default, it is clear that the deposit, even it was made on the date of the first hearing, was not an unconditional tender of the amount for payment to the landlord. Further, there is also nothing on record to show that what was deposited was the correct amount calculated in accordance with the provisions of Section 20 (4). In these circumstances, we hold that the appellant has failed to establish that he has complied with the conditions specified in sub section (4) of Section 20 and hence he is 337 not entitled to be relieved against his liability for eviction on the ground set out in clause (a) of sub section (2) of the said Section. This appeal is, therefore, devoid of merits and is accordingly dismissed. We direct the parties to bear their respective costs. N. K. A. Appeal dismissed.

The respondent landlord filed a suit under section 20(2)(a) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act 1972 against the appellant praying for his eviction from the suit premises. It was alleged that the tenant was in arrears of rent for not less than four months from April 9, 1972, that he had failed to pay the same within one month from the date of the notice to him and that the tenant had declined to pay arrears of rent despite the notice. While denying the allegation of default in payment of rent the tenant claimed that since he stood surety for the landlord for the payment of arrears of sales tax payable by him there could not be any question of arrears of rent being outstanding against him to the landlord. Although the trial Court found it as a fact that the tenant had committed default in payment of rent for more than four months after the notice of demand had been issued it held that the landlord 's action in inducing the tenant to stand surety for him for payment of arrears of sales tax constituted waiver of the demand for rent and that for this reason the landlord was not entitled to the relief of ejectment. In revision the District Judge found that the tenant had at no stage of the proceedings before the trial Court put forward the plea of waiver but that an issue had been framed by the trial Court of its own accord. On merits the District Judge held that no conduct on the part of the landlord which amounted to waiver had been established because the tenant had not actually made any payment on behalf of the landlord towards the sales tax dues. The High Court dismissed the tenant 's revision petition under section 115 C.P.C. [Since in the special leave petition the tenant contended that the revision petition Sled by him in the High Court was not maintainable in law, this Court granted special leave to appeal against the judgment of the District Court.] 332 Dismissing the appeal, ^ HELD: The District Court was right in holding That in the absence of any plea of waiver put forward by the tenant the trial Court was not really called upon to go into that question. Therefore, the finding of the trial Court that the landlord 's notice had been effaced by his (landlord 's) subsequent conduct which amounted to waiver was manifestly illegal and perverse. It was the specific case of the tenant that no amount whatever had been paid by him to the sales tax authorities on behalf of the landlord. Neither did the landlord make any endorsement on the rent deed adjusting the proposed payment of sales tax against arrears of rent. [335 A D] Having failed to establish that he had complied with the conditions specified in section 20(4) of the Act the tenant is not entitled to be relieved against his liability for eviction on the ground set out in section 20(2 )(a) of the Act. [336 H 337 A] The provisions of section 20(4) will get attracted only if the tenant had at the first hearing of the suit unconditionally paid or tendered to the landlord the entire amount of rent and damages due from him for use and occupation of the building together with interest thereon at 9% per annum. There is nothing on record to show that the deposit was made on the first date of hearing and that it was made by way of unconditional tender for payment to the landlord. On the contrary the tenant in his written statement, had stated that since he had IL stood surety for the landlord 's arrears of sales tax, there was no default by him r in the payment of rent. In the face of a plea disputing the existence of any arrears of rent and denying the default the deposit even if made on the date of the first hearing, was not an unconditional tender of the amount for payment to the landlord. Nor is there anything on the record to show that what was deposited was the correct amount calculated in accordance with the provisions of section 20(4) of the Act. [336 D H]

Appeals Nos. 422 & 423 of 1958. 433 Appeals from the judgment and decree dated November 22, 1957, of the Allahabad High Court (Lucknow Bench), Lucknow, in Civil Misc. Applications Nos. 54 and 56 of 1957. Niamatullah, section N. Andley and J. B. Dadachanji for O. N. Srivastava, for the appellant. H. N. Sanyal, Additional Solicitor General of India, Bishun Singh and C. P. Lal, for the respondent. December 14. The Judgment of section K. Das and A. K. Sarkar, JJ. was delivered by ' Sarkar, J. Subba Rao, J. delivered a separate judgment. SARKAR J. Raja Udit Narain Singh was the proprietor of Ramnagar estate, a big taluqdari in district Barabanki in Uttar Pradesh, formerly known as the United Provinces of Agra and Oudh and for short U.P., an abbreviation still in use. Ramnagar estate was governed by the Oudh Estates Act (1 of 1869), and in the absence of any disposition by the holder for the time being, it appears to have devolved according to the rule of primogeniture. Raja Udit Narain died in 1927 leaving two sons of whom the older was Raja Harnam and the younger Kanwar Sarnam. Kanwar Sarnam died in 1928 leaving the respondent his only son, and a widow, Parbati Kuer. Raja Harnam died thereafter in 1935 without issue, leaving the appellant his sole widow. After the death of Raja Harnam disputes arose between the respondent, who was then a minor and was represented by his certificated guardian, his mother Parbati Kuer, and the appellant, a reference to which has now to be made. The appellant 's contentions appear to have been as follows : Raja Udit Narain left a will bequeathing certain villages of Ramnagar estate to Raja Harnam absolutely and the rest of it, as set out in a schedule to the will, to him for life and after him to Kanwar Sarnam for life and thereafter or failing the latter, to the respondent absolutely. The will declared that village Bichelka had been given to her for life as " runumal " 434 or wedding present and that she would have a maintenance of Rs. 500, per month out of the estate. The schedule to the will did not mention five of the villages of Ramnagar estate with regard to which Raja Udit Narain died intestate and these thereupon devolved on Raja Harnam under the rule of primogeniture that applied to the estate. After Raja Udit Narain 's death, Raja Harnam went into possession of the estate and executed a will leaving all the properties over which he had a power of disposition, including the seven villages bequeathed to him absolutely by Raja Udit Narain and the five villages not disposed of by his will, to her in absolute right. Thereafter, Raja Harnam executed a deed of gift in her favour giving her most of the immovable properties covered by his will and several house properties in Lucknow. On these allegations the appellant made a claim to all the properties said to have been given to her by the, aforesaid wills and the gift of Raja Harnam. Parbati Kuer, on behalf of her son, the respondent, challenged the factum and validity of the wills and the gift said to have been made by Raja Harnam and resisted the appellant 's claim. And so the disputes between the parties arose. The Deputy Commissioner of Barabanki intervened to restore peace and brought about a family arrangement, into which the parties entered on January 22, 1935, settling the disputes on the terms therein contained. Under this family arrangement certain properties came to the appellant but it is not necessary for the purposes of these appeals to refer to them in detail. The peace created by the family arrangement did not last long. The respondent after attaining majority on September 12, 1940, repudiated the family arrangement on grounds to which it is unnecessary to refer. On September 6, 1943, he filed a suit against the appellant to set aside the family arrangement and recover from her the properties of the estate in her possession. The defence of the appellant to the suit was that the family arrangement was binding on the respondent. However, to cover the eventuality of the 435 family arrangement being found to be void or voidable, the appellant herself filed a suit against respondent claiming title to various properties of the estate under the will of Raja Udit Narain and the will and gift of Raja Harnam. The respondent contested this suit. With the particulars of the claims and defences in the suits or their soundness we are not concerned in these appeals, and a reference to them will not be necessary. While these two suits were pending, the appellant was on November 12, 1945, declared by the District Judge of Lucknow under the provisions of the Lunacy Act, 1912, to be a person of unsound mind. Thereupon the Court of Wards assumed superintendence of the properties of the appellant under the provisions of the U.P. Court of Wards Act, hereinafter referred to as the Act, and placed them in the charge of the Deputy Commissioner of Barabanki district in which most of these properties were situate. The Court of Wards gave to these properties the name Ganeshpur estate. Upon such assumption of charge the cause titles of the two suits were amended and in the place of the appellant 's name, the name " Deputy Commissioner, Barabanki I/C Court of Wards, Ganeshpur estate " was substituted, such amendment being required by the provisions of section 55 of the Act the terms of which we shall presently set out. The letters " I/C " in the substituted name were an abbreviation of the words " in charge of. " Thereafter, the respondent 's suit was dismissed by a decree dated June 3, 1947, except as to his claim to two villages, it being found that in them Raja Harnam had only a life estate and to them the appellant had no claim after his death, and that these had been given to her by the family arrangement by mistake. As the family arrangement was substantially upheld by the decree in the respondent 's suit, the appellant 's suit became unnecessary for it bad been founded on the basis that the family arrangement was void or could be avoided. It had therefore to be dismissed. Two appeals were filed from the decisions in these two suits in the High Court at Lucknow, one by the Deputy 436 Commissioner of Barabanki representing the estate of the appellant against the decree dismissing the appellant 's suit, being F.C.A. No. 99 of 1947, and the other by the respondent, being F.C.A. No. 2 of 1948, against the decree dismissing his suit. F.C.A. No. 99 appears to have been filed merely as a matter of safety, to be proceeded with only in case the respondent 's appeal, F.C.A. No. 2 of 1948, succeeded. While the appeals were pending, the respondent made an application under the Act to have his estate placed under the charge of the Court of Wards. That application was accepted and the superintendence of his estate was taken over by the Court of Wards on February 8, 1950. The respondent 's estate was also placed by the Court of Wards in the charge of the Deputy Commissioner, Barabanki, as the estate was within his jurisdiction. The Court of Wards retained for it its old name of Ramnagar estate. The cause titles of the appeals had again to be amended in view of section 55 of the Act and for the name of the respondent, the name " Deputy Commissioner Barabanki I/C Court of Wards Ramnagar estate " was substituted. The cause titles of the appeals then became, Deputy Commissioner, Barabanki I/C Court of Wards Ganeshpur estate Appellant versus Deputy Commissioner, Barabanki I/C Court of Wards Ramnagar estate Respondent AND Deputy Commissioner, BarabankiI/C Court of Wards Ramnagar estate Appellant versus Deputy Commissioner, BarabankiI/C Court of Wards Ganeshpur estate . Respondent. The position thus was that the estates of both the appellant and the respondent came under the superintendence of the same Court of Wards and were placed in the charge of the same Deputy Commissioner in whose name each party sued and was sued in the appeals. This situation was the occasion for the 437 proceedings to be referred to presently, from which these appeals arise. Before coming to these proceedings, certain other facts have however to be stated. On December 3, 1951, the Court of Wards passed a resolution settling the appeals on certain terms as it thought that such settlement was in the best interests of the two contending wards, particularly in view of the heavy costs of the litigation and the then impending legislation for abolition of zemindaries. Thereafter, under the instructions of the Court of Wards, the lawyers appearing for the parties in the appeals presented to the High Court on April 28,1952, petitions for recording compromises in the appeals and for passing decrees in accordance therewith. On May 2, 1952, the High Court passed orders directing the compromises to be recorded and decrees to be passed in the appeals in terms thereof. The appeals were thus disposed of and the proceedings therein terminated. When the appeals were so compromised, the paperbooks in respect of them were in the course of preparation. It is not necessary to encumber this judgment by setting out the terms of the compromise. It is however of some importance to state that the petitions embodying the compromise were signed twice by Mr. K. A. P. Stevenson, once as Deputy Commissioner Barabanki, I/C Court of Wards, Ramnagar estate, district Barabanki (Appellant in F.C.A. No. 2 of 1948 and respondent in F.C.A. No. 99 of 1947)" and again as " I/C Court of Wards, Ganeshpur estate, district Barabanki (Respondent in F.C.A. No. 2 of 1948 and appellant in F.C.A. No. 99 of 1947)". Obviously, Mr. Stevenson, the Deputy Commissioner, Barabanki, signed each petition once as representing the appellant and again as representing the respondent. It is also of some interest to note that the petitions were presented in Court by Sri Sita Ram, Advocate for the appellant 's estate and Sri Bishun Singh, Advocate for the respondent 's estate. Some more events happened before the proceedings out of which these appeals arise were started. Shortly after the compromise decrees had been passed, ail Act 56 438 abolishing zemindaries came into force in U.P. and the zemindary estates of the parties vested in the Government of U.P. Thereupon the Court of Wards ceased to function. In anticipation of this situation the estates of the parties were released by the Court of Wards. In view, however, of the appellant 's mental incapacity, an order was passed by the District Judge of Lucknow, on April 27, 1953, in the lunacy proceedings, placing her estate in the charge of the Deputy Commissioner, Barabanki and one Mr. M. L. Sarin and appointing them as the guardians of her person and property. A few years later, the appellant recovered from her affliction and an order was passed by the District Judge, Lucknow on October 6, 1956, declaring her to be of sound mind. Her aforesaid guardians were thereupon discharged and she was put in possession of her properties. After the appellant had regained her mental competence, she began to entertain a feeling that the compromise in the appeals had not done full justice to her and she set about to find a way to get out of it. On January 14, 1957, the appellant made two applications to the High Court at Lucknow, one in each of the said appeals Nos. 99 of 1947 and 2 of 1948, for an order that the work of the preparation of the paperbooks of the said appeals be resumed under Chapter XIII of the Rules of the High Court from the stage at which it was interrupted by the compromise decrees, as those decrees were a nullity and did not terminate the appeals which must therefore be deemed to be pending. These applications were heard together by the High Court and dismissed by its judgment and orders dated November 22, 1957. It is against this judgment and the orders that the present appeals have been brought. These appeals were consolidated by an order made by the High Court and they have been heard together in this Court. It is not the appellant 's case that the compromise was brought about by fraud or was otherwise vitiated on similar grounds and is therefore liable to be set aside. No avoidance of the compromise is sought. In fact, the appellant had initially alleged in her petitions 439 that the compromise had been brought about by fraud and collusion. She however amended the petitions by deleting the paragraphs containing these allegations and chose to proceed on the purely legal basis that the compromise was a nullity. It is for this reason that we have not referred to the terms of the compromise. No question arises in those appeals as to their fairness or as to whether they should be avoided on any equitable ground. If the compromise decrees were a nullity as the appellant contends, then she would no doubt be entitled to proceed on the basis as if they bad never been made and in that view her applications would be competent and should succeed. The question is whether the compromise decrees were a nullity. The appellant first says that the compromise decrees were a nullity as the terms of section 56 of the Act which are mandatory, had not been complied with. That section reads thus: Section 56: When in any suit or proceeding two or more wards being parties have conflicting interests, the Court of Wards shall appoint for each such ward a representative and the said representative shall thereupon conduct or defend the case on behalf of the ward whom he represents, subject to the general control of the Court of Wards. It is true that no representative had been appointed under this section for either party for the purposes of the two appeals. It is said that this omission to appoint representatives made the compromise decrees a nullity as the terms of the section are imperative. The question then is, is section 56 imperative ? In our view, it is not. It, no doubt, says that " the Court of Wards shall appoint . a representative. " But it is well known that the use of the word " shall " is not conclusive of the question whether a provision is mandatory: see Hari Vishnu Kamath vs Syed Ahmad Ishaque (1). The intention of the legislature has to be gathered from the whole statute. Several grounds are suggested why section 56 should be held to be imperative. First, it is said that otherwise, (1)[1955] 1 S.C.R. 1104. 440 in view of section 55, it would be otiose. Section 55 is in these terms: Section 55: No ward shall sue or be sued nor shall any proceedings be taken in the civil court otherwise than by and in the name of the Collector in charge of his property or such other person as the Court of Wards may appoint in this behalf. It is said that the concluding words of section 55 give the Court of Wards a discretionary power to appoint a representative and therefore if section 56 was only directory, then it would also give the same discretionary power to appoint a representative and thus become otiose. The contention seems to us to be ill founded. In order that one section may be rendered otiose by a certain interpretation of another, that interpretation must make the two sections deal with the same subject matter, the two must then be serving the same purpose. The argument is founded on the basis that read as an imperative provision section 56 would not be otiose, that is, then it would be serving a purpose different from that which section 55 served. Now, we do not appreciate how section 56 becomes otiose by being read as a directory provision while it would not be so if read as a mandatory provision. Surely, the subject matter of a statutory provision is not changed whether it is read as directory or as mandatory. If it was not otiose as a mandatory provision, it would no more be so as a directory provision. Another fallacy in this argument is that it assumes that by reading section 56 as a directory provision a discretion is conferred on the Court of Wards to appoint or not to appoint representatives for the wards, as it pleases. A provision giving a discretionary power leaves the donee of the power to use or not to use it at his discretion. A directory provision however gives no discretionary power free to do or not to do the thing directed. A directory provision is intended to be obeyed but a failure to obey it does not render a thing duly done in disobedience of it, a nullity. Therefore, it seems to us to be wrong to say that by reading section 56 as merely directory any discretion is conferred on the Court of Wards. 441 It also seems clear to us that sections 55 and 56 deal with entirely different matters. Section 55 deals only with the name in which a ward may sue or be sued. Section 56 deals with appointment of representatives for two or more wards who are parties to a litigation and have conflicting interests, to defend or conduct the case on behalf of the wards, and section 56 would apply whether the wards were sued in the names of the Collectors in charge of their properties or in the names of persons appointed for the purpose by the Court of Wards. There is nothing to show that the represen tatives appointed under section 56 are to be named in the record of the case as representing the wards. The section does not say so Section 56 contemplates a stage where two or more wards are already parties to a litigation. It therefore contemplates the wards suing or being sued in the names of the Collectors in charge of their properties or of other persons appointed under section 55. Notwithstanding this, section 56 does not provide that the representatives appointed under it shall replace the Collector or the person appointed under section 55 on the record of the litigation. Therefore it seems to us clear that if section 56 is read as a directory provision, section 55 would not become otiose. Next it is said that sections 57 and 58 of the Act also deal with the appointment by the Court of Wards of representatives for the wards in certain proceedings between them but in these sections the words used are respectively "shall be lawful for the Court of Wards to appoint" and "may appoint", while the word used in section 56 is "shall" and that this distinction clearly indicates that the intention of the legislature is to make section 56 imperative. This argument also does not appear to us to be sound. We are not satisfied that because a statute uses in some provisions the word "shall" and in others the words "shall be lawful" or "may", it necessarily indicates thereby that the provisions containing the word "shall" are to be understood as mandatory provisions. We think that each provision has to be considered by itself, and the context in which the word "shall" occurs in it, the object of the provision 442 and other considerations may lead to the view that in spite of the use of the word "shall", it is a directory provision. It seems to us that sections 57 and 58 rather indicate that if the appointments there contemplated are merely directory, the appointments provided by section 56 are also directory. Section 57 empowers the Court of Wards when any question arises between two or more wards of such nature that an adjudication upon it by a court is expedient, to appoint a representative for each ward and require the representatives so appointed to prepare a statement containing the point or points for determination and to file the statement in a civil court in the form of a case for the opinion of the court. The section further provides that the civil court shall proceed to hear and dispose of the case in the manner prescribed by the Code of Civil Procedure for the hearing and disposal of suits and also that the case shall be conducted by the representatives appointed for the wards subject to the general control of the Court of Wards. Section 58 empowers the Court of Wards when it thinks that a dispute which has arisen between two or more wards is a fit subject for reference to arbitration, to appoint a representative for each ward and require the representatives to submit the dispute to the arbitration of a person or persons approved by it. It would appear therefore that the position of a ward is the same whether the case is governed by section 56, section 57 or section 58. In each case one ward has a dispute with another; in each their interests conflict. In the first two cases, the conflict is submitted to the decision of a civil court and in the third, to arbitration. There is no reason to think that the legislature intended that the interests of the wards required more protection in a case falling under section 56 than in a case falling under section 57 or section 58. If, therefore, as the argument concedes, the appointment of representatives was not intended by the legislature to be obligatory under sections 57 and 58, no more could the legislature have intended the appointment of representatives under section 56 obligatory. This leads us to the argument based on the object of a. 56. It is said that the object of the section is to 443 protect the interests of the wards. Unless the terms of the section are obeyed, it is contended, the wards ' interests will suffer. So, it is said that section 56 must be construed as a mandatory provision. This argument overlooks that part of section 56 which makes the representatives appointed under it subject to the general control of the Court of Wards in the discharge of their functions. It is clear, therefore, that it is the intention of the legislature that the interests of the wards should really be in the charge of the Court of Wards in spite of the appointment of the representatives and in spite of the conflicting interests of the wards. It follows that the direction to appoint representatives has not been inserted in section 56 to protect the conflicting interests of the wards or to ensure such interests being properly looked after by taking them out of the charge of the Court of Wards. It would indeed be against the whole concept of the Court of Wards Act to hold that it contemplated a situation where the interests of the wards would be taken out of the hands of the Court of Wards while it retained charge of their estates. We are, therefore, inclined to agree with the view of the learned Judges of the High Court that " The reason for incorporating section 56 in the Act appears to have been with the idea of avoiding any embarrassment to the officers of the Court of Wards who may have had the task in certain cases of representing rival interests. " There is thus nothing in the object with which section 56 was enacted to lead us to hold that its terms were intended to be imperative. We may look at the matter from another point of view. Under section 15 of the Act, the Court of Wards, upon assuming the superintendence of any property, is to nominate a collector or other person to be in charge of it. Usually it is the Collector of the district, sometimes called the Deputy Commissioner, in which the largest part of the property is situate who is nominated for the purpose. In the present case, as it happened, the estates of both the appellant and the respondent were situate in the same district of Barabanki and had, therefore, been put in charge of 444 the same officer, namely, the Deputy Commissioner of that district. Now, it may so happen in another case that the estates of the wards are in charge of different Collectors or Deputy Commissioners. To such a case also section 56 would be applicable if the two wards happened to be parties to a litigation with conflicting interests. It would be strange if in such a case any decree that came to be passed had to be held to be a nullity because the terms of that section had not been complied with. It could not, of course, then be said that the interests of the wards had been prejudiced by the omission to appoint representatives under section 56, for, there would in such a case be no difficulty for the Collectors to look after the interests of their respective wards in the best way possible. This view of the matter also seems to indicate that section 56 is not imperative. We have now examined all the arguments advanced in support of the view that section 56 is an imperative provision. We find them without any force. The question whether a statute is imperative or otherwise is after all one of intention of the legislature. The rules of interpretation are for discovering that intention. We have not found any rule which would lead us to hold that section 56 was intended to be an imperative provision. The section serves no purpose except the removal of practical inconvenience in the conduct of a suit or its defence. By providing that the representatives shall be subject to the control of the Court of Wards, the section makes it clear that in spite of the appointment of the representatives the Court of Wards retains all powers in respect of the litigation. Such powers are given to the Court of Wards by the Act itself. Under section 38, the Court of Wards has the right to do all things which it may judge to be for the advantage of the ward. One of such powers is to conduct a litigation on behalf of a ward, in any manner it thinks best in the interests of the ward it could therefore compel the representatives to settle the litigation on terms decided by it. If it could so compel the representatives, it would be insensible to suggest that it could not itself effect the settlement. 445 Clearly, the Court of Wards could itself settle a litigation in which two of its wards were involved even where representatives had been appointed under section 56. The appointment of representatives could not hence have been intended to be obligatory. In our view. therefore, the section is clearly directory. The failure to observe the provisions of the section did not render the compromise decrees in this case a nullity. It is then said that there was in law no compromise in this case, A compromise, it is said, is a contract and in order that there may be a contract 'there must be two parties to it which there was not in this case. It is contended that there was only one party in the present compromise, namely, the Deputy Commissioner, Barabanki. It is true that there must be two parties to make a contract. But it seems to us that the contention that there was only one party to the compromise proceeds on a misconception of its real nature. It overlooks that the compromise was really between the two wards, the appellant and the respondent. The compromise was brought about by the Court of Wards in exercise of its statutory powers. That the Court of Wards could make a compromise on behalf of a ward is clear and not in dispute. It does not lose its powers when it has two wards and can therefore make a compromise between them. When it does so, it makes a contract between the two of them. Therefore, to the present compromise there were two parties. The act expressly contemplates a right in the Court of Wards to make a contract between two of its Wards. Thus under section 61(1) of the Act, a contract executed by the Court of Wards for a ward may be executed in its own name or on behalf of the ward. Under sub sec. (3) of that section, when the transferor and transferee are both its wards, the Court of Wards shall have power to enter into convenants on behalf of the transferor and the transferee respectively. Sub section (2) of section 61 provides that the convenants made by the Court of Wards on behalf of a ward shall be binding on the ward. If the Court of Wards did not have the power to make a contract between two of its wards, it would 57 446 often be impossible to carry on the management of the wards ' properties beneficiently. The power of the Court of Wards to make a contract for a ward is a statutory power. We find nothing in the Act to indicate that such power does not exist for making a contract between two wards. It is true that the cause titles of the appeals showed the Deputy Commissioner, Barabanki, as both the appellant and the respondent. But that did not make the Deputy Commissioner himself a party to the appeals. There, of course, cannot be a litigation unless there are two parties to it. It will be remembered that in the cause titles the Deputy Commissioner, Barabanki, was described once as in charge of Ganeshpur estate and again as in charge of Ramnagar estate. This indicates that the Deputy Commissioner was mentioned in the cause titles as representing the the two real parties, i.e., the appellant and the respondent. Then again the Deputy Commissioner, Barabanki, was brought on the record because of section 55 of the Act. The terms of that section have been set out earlier and they leave no doubt that the person Suing Or being sued is the ward and that the ward is suing or being sued in the name of the Collector. Therefore also when the appeals were compromised, the compromise was between the parties to the appeals, namely, the appellant and the respondent. It was not a compromise which the Deputy Commissioner, Barabanki, made with himself though he alone signed the compromise petition. The contention that there was no compromise in this case because there were not two parties, must hence fail. It is lastly said that the compromise decrees were a nullity in view of the principles embodied in Or. XXXII of the Code of Civil Procedure. That order deals with minors and persons of unsound mind and requires that when any such person is a party to a suit, the Court will appoint some one to be his guardian for the suit. It is true that it is necessary that the person appointed as guardian should have no interest in the litigation against the person under disability. It is 447 contended on behalf of the appellant that she was a person of unsound mind and so some disinterested person should have been appointed her guardian for the appeals and that the Deputy Commissioner, Barabanki, was not such a disinterested person as he was also interested in the respondent, the opposing party in the appeals. It is said that the decrees passed in the appeals without another guardian having been appointed for the appellant are a nullity. Now, Or. XXXII, r.4(2) provides that where a person under disability has a guardian declared by a competent authority, no other person shall be appointed his guardian unless the Court considers for reasons to be recorded, that it is for the welfare of the person under disability that another person should be appointed as his guardian. Section 27 of the Act gives the Court of Wards the power to appoint a guardian for a ward who is of unsound mind. The Deputy Commissioner, Barabanki, was in fact appointed the guardian of the appellant under the Act when upon her lunacy, her estate came under the superintendence of the Court of Wards. Her estate was in his charge. Therefore, under the provisions of Or. XXXII, r. 4, the Deputy Commissioner, Barabanki, was entitled to act as the appellant 's guardian for the appeals and the Court had not made any order a pointing another person to be her guardian. The Court of Wards is a statutory body and was created to look after the interests of the wards. Its constitution is such that it can be trusted to be impartial. Its position is wholly different from that of a private guardian. No fault can be found with the Court in having left the interests of the appellant in charge of the Court of Wards though it was also in charge of the interests of the respondent. Indeed, it is at least arguable if the civil court could have by any order that it might have made, prevented the Court of Wards from discharging its statutory duty of looking after the interests of its ward. Therefore it seems to us that the failure of the Court to appoint another person as the guardian of the appellant for the suits or the appeals did not make the compromise decrees a nullity. 448 One other point raised on behalf of the appellant remains to be considered. It is said that in fact there was no compromise between the two wards. Now, this is a question of fact and was not raised in the High Court. The respondent had no chance of meeting the allegation of fact now made. We also have not the advantage of the views of the High Court on this question of fact. It would be unfair to the respondent to allow such a question to be raised now. However that may be, we are satisfied that there was in fact a compromise made between the two wards by the Court of Wards. Our attention has been drawn to the resolution passed by the Court of Wards directing the compromise to be made. That, in our opinion, brought about the compromise between the two wards; it was the only way in which the Court of Wards could have brought about the compromise. We may also point out that the compromise petitions were signed by the Deputy Commissioner, Barabanki, twice, once for each of the parties, and had been 'put into court by the lawyers respectively engaged for the parties for the purpose. We, therefore, think that the contention that there was in fact no compromise is entirely without force. In our opinion, these appeals must fail and they are therefore dismissed with costs. SUBBA RAO J. I have had the advantage of perusing the judgment of my learned brother, Sarkar, J. I regret my inability to agree with him. The facts of the case and the progressive stages of the litigation are fully stated in the judgment of my learned brother, and it is not necessary to restate them here in detail. It would suffice if the factual basis giving rise to the main controversy in the case be stated. The appellant was the owner of Ganesbpur estate and the respondent of Ramnagar estate. Both of them became wards of the Court of Wards and both the estates were under the management of the Deputy Commissioner, Barabanki. Between the two estates there was litigation and at the crucial point of time, 449 two appeals, being F.C.A. No. 99 of 1947 and F.C.A. No. 2 of 1948, were pending on the file of the High Court at Allahabad. The cause titles in the appeals give the following array of parties F.C.A. No. 99 of 1947 Deputy Commissioner, Barabanki, I/C Court of Wards, Ganeshpur estate, district Barabanki. Appellant versus Deputy Commissioner, Barabanki, I/C Court of Wards, Ramnagar estate, district Barabanki. Respondent F.C.A. No. 2 of 1948 Deputy Commissioner, Barabanki, I/C Court of Wards, Ramnagar estate, district Barabanki. Appellant versus Deputy Commissioner, Barabanki, I/C Court of Wards, Ganeshpur estate, district Barabanki. Respondent It is clear from the said array of parties in the appeals that the same person represented both the estates, and the Deputy Commissioner, Barabanki, was both the appellant and respondent. It appears that the Court of Wards effected a settlement between the two wards in respect of the outstanding disputes between them, and, presumably as directed by the Court of Wards, the Deputy Commissioner, Barabanki, filed a petition in the High Court for recording the compromise. The petition was signed by Sri K. A. P. Stevenson, I.A.S., Deputy Commissioner, Barabanki, on behalf of both the estates. On May 2, 1952, the High Court passed a decree in terms of the said compromise. The said facts give rise to a short but difficult question, namely, whether the compromise effected was a nullity entitling the appellant to ignore it and to have the appeals disposed of on merits. The main argument of Mr. Niamatullah, the learned Counsel for the appellant, may be summarized thus: Section 56 of the U.P. Court of Wards Act, 1912 450 (hereinafter called the Act) imposes a statutory duty on the Court of Wards to appoint separate representatives when in a suit there are conflicting claims between two of its wards, and the Court has no jurisdiction to proceed with such a suit and make any order or decree on merits or on compromise unless such an appointment is made. In the present case, admittedly no such appointment was made and the compromise petition was filed by the Deputy Commissioner, Barabanki, in his dual capacity as the appellant as well as the respondent, and, therefore, the decree made therein was a nullity. If it was a nullity, the argument proceeds, the Court should ignore it and dispose of the appeals as if they were still on its file. This argument, if accepted, would entail the acceptance of the appeals. As I propose to do so, it is unnecessary to particularize the other contentions of the learned Counsel or give my findings thereon. For the same reason, the counter argument of the learned Additional Solicitor General may conveniently be confined only to the said argument. While conceding that the application under section 151 of the Civil Procedure Code was maintainable if the decree was a nullity, the learned Counsel for the respondent contends that notwithstanding the non compliance of the provisions of section 56 of the Act, the High Court had jurisdiction to record the compromise lawfully effected by the Court of Wards, and therefore, the decree was not a nullity and could not be ignored. The question falls to be decided on a true interpretation of the provisions of section 56 of the Act. Section 56 appears in Chapter VII of the Act dealing with suits. It would be convenient at the outset to read sections 55 and 56 of the Act. section 55: "No ward shall sue or be sued nor shall any proceedings be taken in the civil court otherwise than by and in the name of the Collector in charge of his property or such other person as the Court of Wards may appoint in this behalf. " section 56: " When in any suit or proceeding two or more wards being parties have conflicting interests, 451 the Court of Wards shall appoint for each such ward a representative and the said representative shall thereupon conduct or defend the case on behalf the ward whom he represents, subject to the general control of the Court of Wards. " These two sections are placed in juxtaposition and they appear to be complementary to each other. Section 55 prescribes the mode or proceeding by or against the ward in a court. Ordinarily, he should sue or be sued in the name of the Collector in charge of his pro. perty. It also visualizes the contingency when a Court of Wards may appoint in its discretion some other person instead of the Collector for the Purpose of this section. 56 deals with a particular situation, namely, when there are conflicting interests between the wards who are parties to a suit, and, in that event, a duty is cast on the Court of Wards to appoint separate representatives for each such ward. The object of section 56 is selfevident; for, in the contingency contemplated by that section, an anomalous situation is created, if the general rule prescribed by section 55 is followed, for both the plaintiff and the defendant would be the Collector, a procedure that cannot be tolerated by any civilised jurisprudence. That apart, the procedure is obviously detrimental to the interests of the wards, for there is every danger of their respective interests not being protected and properly represented in the court. To avoid this anomaly and obvious prejudice to the parties, section 56 has been enacted. A combined reading of the said provisions therefore indicates that the procedure, laid down in section 55 must, in the contingency contemplated by section 56, give way to the procedure prescribed by the latter section. The next question is what does the word " representative " in section 56 mean ? Does it mean, as the learned, Additional Solicitor General contends, an agent who is entrusted with the duty of assisting the Collector, or., as the learned Counsel for the appellant argues, one who represents the ward in a suit by being brought on record as his representative ? The word " representative " has in law different meanings. To represent means " to stand in place of " and a representative 452 is one, who stands in the place of another. The word " reprsentative " with prefixes like legal ' or personal ' added or not, when used with reference to ownership of land may mean an heir, executor or legatee. But in the context of a suit, the word is also used in the sense that, one who represents another, when the latter is a disqualified person like a minor or a lunatic. In this category come guardians. They are appointed by court to represent a minor or a lunatic, as the case may be, and the suit without such representative cannot legally proceed. But a statute may confer power upon an authority other than the court to appoint a representative to a disqualified person. That is the position in the present case. A statutory representative acts for, and in the place of, a disqualified ward and without such valid representative on record the suit cannot legally proceed, just like in the case of a minor or a lunatic to represent whose interests no guardian is appointed. If the intention of the legislature was only to provide for the appointment of a separate agent to help the Collector, who had a dual role to perform, it would have used the word " agent " in the section. That apart, the Collector does not require the statutory power to appoint an agent to help him in the conduct of a suit; for, as a party to the suit, he can always appoint separate Advocates for the two wards. That the word " representative" does not mean an agent but is intended to convey the idea of one representing a ward and as such brought on record in that capacity, is made clear by the other provisions of the Act wherein the same word appears. Section 57 of the Act reads: " (1) Where any question arises as between two or more wards of such nature that an adjudication upon it by a civil court is expedient, it shall be lawful for the Court of Wards to appoint a representative on behalf of each ward. The representative so appointed shall prepare a statement containing the point or points for determination and shall on behalf of the said wards file the statement in a civil court having jurisdiction in the form of a case for the opinion of the said court, 453 (2) The civil Court shall then proceed to hear and dispose of the case in the manner prescribed by the Code of Civil Procedure, 1908, for the hearing and disposal of suits. (3) The case shall be conducted on behalf of the wards by their representatives appointed under subsection (1) of this section subject to the general control of the Court of Wards. " It is manifest from this section that the duty of the representative under section 57 is not to act as a clerk or an assistant to the ward but to represent him in the proceedings. He would be on record representing the ward and it is impossible to contend that the proceedings under section 57 of the Act can either be initiated or disposed of without a representative being appointed in that behalf. Section 58 of the Act reads: "When it appears to the Court of Wards that any question or dispute arising between two or more wards is a fit subject for reference to arbitration, it may appoint a representative on behalf of each such ward and require the said representatives to submit the question or dispute to the arbitration of such person or persons as it may approve." Under this section also the appointment of a representative on behalf of each ward is a pre requisite for the initiation and conduct of arbitration proceedings. Here also the representative is not appointed to assist the ward but to represent him in the proceedings. It is a well known rule of construction that a similar meaning should be given to the word " representative " in the Act unless the context requires otherwise. The object of the appointment of a representative under sections 56, 57 and 58 of the Act is the same and the same meaning should be given to that word, namely, that the representative appointed is one who represents the ward in the proceedings and is brought on record as such. Laying emphasis on the word " conduct " or defend " in section 56 of the Act and on the omission of the word " compromise " therein, it is contended that the representative appointed thereunder has no 58 454 power to ' enter into a compromise. The section does not, in my View, bear out this construction. The first part of the section enjoins on the Court of Wards to appoint a representative to each of the wards and then the second part proceeds to state that such a representative should thereupon conduct or defend the case. The later part of the section does not define the meaning of the word " representative " and limit its scope, but only brings out the idea that the suit shall not proceed till such a representative is appointed. A person appointed to represent a disqualified person shall have all the powers of a party subject to the limitations imposed by relevant statutes and the only limitation imposed by section 56 of the Act is that the said representative is subject to the general control of the Court of Wards. It follows that the representative can enter into a compromise subject, to the general control of the Court of Wards. Assistance is sought to be derived by the Additional Solicitor General from decisions distinguishing between the powers of a Solicitor and a Counsel and holding that a Solicitor being only a representative cannot enter into a compromise without the consent of the client, while the latter being in charge of the entire litigation can do so. In my view these decisions are based upon the peculiar characteristics of the two branches of the profession and cannot legitimately be invoked to construe the provisions of section 56 of the Act. Nor the fact that the representative appointed under section 56 of the Act is subject to the general control of the, Court of Wards can be relied upon to subvert the operation of the section itself. The question of control arises only after a representative is appointed and the appointing authority cannot obviously ignore its statutory duty and purport to exercise the duties of representatives in exercise of its power of general control over non existent representatives. Assuming that the representative has no power to compromise the suit, it does not materially affect the ,question raised in this case. In that view the authority empowered to do so has to effect the compromise, put the same in court through the representatives and 455 obtain a decree thereon. But that does not dispense with the appointment of representatives to conduct and defend the suit, for without such representation the suit itself could not be proceeded with and a decree could not be obtained on the compromise. Lastly, it is said that the provisions of the section are directory and noncompliance thereof would not affect the validity of the compromise decree, if in fact the compromise was effected bona fide by the competent authority. The word " shall " in its ordinary import is "obligatory ", but there are many decisions wherein the courts under different situations construed the word to mean " may ". The High Court in this case relied upon the observations of this Court in Jagan Nath vs Jaswant Singh (1) which run as follows: " It is one of the well recognized rules of interpretation that a provision like this should be held to be non mandatory unless non compliance with the provisions was visited with some penalty. " A perusal of the judgment does not disclose that this Court has laid down any such inflexible rule of construction. It was construing the word " shall " in section 82 of the Representation of the People Act, 1951, ' which lays down that a, petitioner shall join as respondent to his petition all the candidates who were duly nominated at the election other than himself. Having regard to the other provisions of the Act, particularly to section 85 thereof, and the construction put upon a similar word in Order XXXIV, rule 1, of the Civil Procedure Code, this Court held that the word " shall " in section 82 was only directory. This Court did not purport to lay down any broad proposition that whenever the word " shall " is used in a statute it should be construed as directory unless non compliance with the provision is made penal. Nor the decision in The Queen vs Ingall (2) lays down any such wide rule of construction. Under section 42 of Valuation (Metropolis) Act, 1869, provision is made for the performance of several acts within the times prescribed therein. Every matter connected with the valuation must be transacted before the 31st of March, for the (1) ; , 901. (2) , 207 456 list comes into force on the 6th April. But there are other sections whereunder provision is made for preparing the valuation lists where there has been omission to make them according to the requirements of the Act. The observance of times is not enforced by penalties. The Court held that, notwithstanding the use of the word "shall " in section 42 of the Valuation (Metropolis) Act, 1869, the provision is only directory. In construing the provisions in such a manner, Lush, J., observed: " We ought to look at the object which the legislature contemplated in passing the Valuation (Metropolis) Act, 1869 But we must, in construing the Act, strike a balance between the inconvenience of holding the list to be null and void and the risk of allowing injury to be done by the delay in making the list; the former seems to me the greater evil, and therefore in my opinion we ought to hold the list to be valid." This judgment is, therefore, an authority for the position that the intention of the legislature should be gathered from the object of the Act and also by striking a balance between the possible inconvenience that would be caused in accepting the one or other of the views. The decision in Caldow vs Pixwell (1) deals with the provisions of section 29 of the Ecclesiastical Dilapidations Act, 1871, which says that within three calendar months after the avoidance of any benefice, the bishop shall direct the surveyor, who shall inspect the buildings of such benefice, and report to the bishop what sum, if any, is required to make good the dilapidations to which the late incumbent or his estate is liable. It was held that the provisions as to the time within which the bishop is to direct the surveyor to inspect and report upon the buildings of a benefice after its avoidance is directory only, and not imperative; and that a direction to inspect and report made by a bishop more than three months after the avoidance of a benefice may be valid. Denman, J., restates the following rules of guidance for construing such provisions: (i) The scope and object of a statute (1) (1876) a C.P.D. 562. 457 are the only guides in determining whether its pro. visions are directory or imperative; (ii) in the absence of an express provision the intention of the legislature is to be ascertained by weighing the consequences of holding a statute to be directory or imperative; and (iii) the statute imposes a public duty upon the Bishop, and it does not create a power or privilege for the benefit of the new incumbent as a private person. On those grounds, among others, the learned Judge held that the provision was only directory. Venkatarama Ayyar, J., in Hari Vishnu Kamath vs Syed Ahmad Ishaque (1) made the following observ. ations: " They (the rules) are well known, and there is no need to repeat them. But they are all of them only aids for ascertaining the true intention of the legislature which is the determining factor, and that must ultimately depend on the context. " In Craies on Statute Law, 5th Edn., the following passage appears, at p. 242: "No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be construed. " Bearing the aforesaid principles in mind let us look at the provisions of section 56 of the Act. The object of section 56 of the Act is to prevent the anomaly of the same person occupying a dual role of plaintiff and defendant and to provide for an effective machinery to safeguard the interests of the wards who are placed under the supervision of the Court of Wards. Should it be held that the appointment of a representative was at the discretion of the Court of Wards, the entire object of the section would be defeated. A person for whose 'benefit the provision was conceived would be represented by the opposite party, a situation anomalous in the extreme. On the other hand, no evil consequences can ordinarily be expected to flow if the provision be (1) ; , 1126. 458 construed as mandatory. A statutory body like the Court of Wards can be relied upon to discharge the duties cast upon it by section 56 of the Act. Even if it fails, the suit or the appeal, as the case may be, will be heard on merits or a fresh compromise may be effected after following the prescribed procedure. The balance of convenience is on the side of the provision being construed as mandatory rather than as directory. In the circumstances, I must hold that the intention of the legislature is to make the provision mandatory and therefore the word "shall" cannot be construed as "may" as contended by the learned Counsel for the respondent. I cannot accept the contention of the learned Additional Solicitor General that even though section 56 is mandatory, the non compliance of the provisions of the section does not affect the validity of the compromise. If, as I have held, the appeal could not be proceeded with without the statutory representative on record, the whole proceeding, including the passing of the compromise, without such representative, was null and void. Before closing the discussion, a reference to the decision of the Judicial Committee in Braja Sunder Deb vs Rajendra Narayan Bhanj Deo (1) is necessary, as strong reliance is placed upon it in support of the contention that non compliance of the mandatory provision of section 56 would not affect the validity of the compromise decree. There a suit between Raja Rajendra Narayan Bhanj Deo and Raja Braja Sunder Deb, who became the ward of the Court of Wards after the institution of the suit, was compromised. The compromise petition was put in the Court and a decree was made thereon. Before the High Court, for the first time, a technical objection was taken. The Subordinate Judge decreed the suit in terms of the compromise and a formal decree dated December, 22, 1922, was drawn and in the cause title of the decree the manager of the Court of Wards was shown as second defendant while he should have been described as the representative of the first defendant. But in (1) (1937) L.R. 65 I.A.57. 459 the body of the decree it was clearly mentioned that the manager of the Court of Wards had been substituted as guardian for the ward. It was contended therein for the appellant that as the manager of the Court of Wards was made an additional defendant and not made a guardian ad litem of the appellant, the compromise decree in the suit was not binding on him. The Judicial Committee negatived the contention and held that if the proper parties were on the record and were dealt with on the correct footing, the mere want of formality would not make void the bargain of the parties and the decree of the Court. But in the present case, a mandatory provision had not been complied with and the suit proceeded with the Collector as both the plaintiff and defendant. The wards were not represented by their separate representatives for the simple reason that no representatives were appointed. There is no analogy between that decision and the present case. For the aforesaid reasons I hold that the compromise decree was a nullity and the appeal must be deemed to be pending on the file of the High Court. In this view, I am relieved of the duty of expressing my opinion on the other questions raised and seriously argued, namely, whether the Court of Wards has power to settle conflicting disputes between two wards and whether such a settlement would be a lawful agreement within the meaning of Order XXIII, rule 3 of the Code of Civil Procedure. In the result, the order of the High Court is set aside and it is directed to dispose of the appeals in accordance with law. The appellant will have his costs here and in the High Court. By the Court: In accordance with the opinion of the majority, the appeals stand dismissed with costs.

The respondent, proprietor of Ramnagar Estate, filed a suit against the appellant, proprietor of Ganeshpur Estate, for the recovery of certain properties. The appellant filed a cross suit against the respondent. During the pendency of the suits the appellant was declared to be a person of unsound mind and the Court of Wards assumed superintendence of her properties under the U. P. Court of Wards Act, and placed them in charge of the Deputy Commissioner of Barabanki. Thereupon the cause titles on the suits were amended and in place of the appellant 's name the 'Deputy Commissioner, Barabanki I/C Court of Wards Ganeshpur Estate ' was substituted. The Trial Court partly decreed the respondent 's suit and dismissed the appellant 's suit. Both parties preferred appeals to the High Court. While the appeals were pending the Court of Wards took over the Estate of the respondent also and placed it also in charge of the Deputy Commissioner, Barabanki. The cause titles of the appeals were then amended and for the name of the respondent, the name 'Deputy Commissioner, Barabanki I/C Court of Wards Ramnagar Estate ' was substituted. Thereafter, the Court of Wards passed a resolution settling the appeal on certain terms and under its instructions the lawyers for the parties presented petitions to the High Court for recording compromises in the appeals. The High Court passed decrees in terms of the compromises. Shortly afterwards the Court of Wards released the two estates. Later, the appellant recovered from her affliction, and was declared to be of sound mind. She presented two applications to the High Court alleging that the compromise decrees were a nullity and praying for a proper disposal of the appeals. The High Court rejected the applications. The appellant contended, that the compromise decrees were a nullity (i) as the Court of Wards had not complied with the mandatory provisions of section 56 of the Act, (ii) as there could not in law be a compromise unless there were two parties but in this case there was only one party the Deputy Commissioner, Barabanki and (iii) as the High Court failed to appoint a disinterested person. as I guardian of the appellant who 432 was of unsound mind under 0. XXXII of the Code of Civil Procedure. Held, (per section K. Das and A. K. Sarkar, jj ), that the compromise decrees were not a nullity and were binding on the parties. Section 56 of the Act which provided that when in a suit or proceeding two or more wards had conflicting interests, " the Court of Wards shall appoint for each such ward a representative " to conduct or defend the case on behalf of the ward whom he represented was clearly direct and the failure of the Court of Wards to observe the provisions thereof did not render the compromise decrees a nullity. A directory provision did not give discretionary power to do or not to do the thing directed ; it was intended to be obeyed but a failure to obey it did not render a thing duly done in disobedience of it a nullity. When the appeals were compromised, the compromise between the parties to the appeals, namely, the appellant and the respondent. It was not a compromise which the Deputy Commissioner, Barabanki, made with himself though he repre sented both the parties. There was nothing in the Act which indicated that the Court of Wards did not have the power of making a contract between two wards. The Deputy Commissioner, Barabanki had been appointed the guardian of the appellant under the Act, and he was entitled to act as her guardian for the appeals under 0. XXXII, r. 4 Of the Code. The Court of Wards was different from a private guardian and could be trusted to be impartial. The High Court was right in leaving the interests of the appellant in charge of the Court of Wards though it was also in charge of the interests of the respondent. Per K. Subba Rao, J. The compromise decrees were a nullity. The provisions of section 56 of the Act were mandatory and a non compliance therewith vitiated the proceedings. The inten tion of the legislature should be gathered from the object of the Act and from a consideration of the inconvenience that may be caused by accepting the one or the other of the views. The object of section 56 was to prevent the anomaly of the same person representing two conflicting interests and to safeguard the interests of the wards placed under the supervision of the Court of Wards. No inconvenience would result from holding the provisions to be mandatory. The word " shall " in section 56 could not be read as " may ". jagan Nath vs jaswant Singh; , , Queen vs Ingall, , Caldow vs Pixwell, , Hari Vishnu Kamath vs Syed Ahmad Ishaque, ; and Braja Sunder Deb vs Rajendra Narayan Bhanj Deo, (1937) L.R. 65 I.A. 57, referred to.

Appeals Nos. 1061 and 1627 to 1629 of 1966. Appeals by special leave from the judgment and order dated March 9, 10, 1965 of the Bombay High Court in Revision Applications Nos. 1428, 1427, 1430 and 1676 of 1961. M. C. Chagla, J. L. Hathi, K. L. Hathi and K. N. Bhat for the appellants (in all the appeals). R. P. Bhat, Janendra Lal, R. A. Gagrat and B. R. Agarwala, for the respondent (in all the appeals). The Judgment of the Court was delivered 'by Shah, J. Under an indenture dated August 2, 1950, Dossibai respondent in this appeal granted a lease of 555 sq. yards in village Pahadi, Taluka Borivli to Mathura Prasad appellant herein for constructing buildings for residential or,business purposes. The appellant constructed buildings on the land. He then submitted an application in the Court of the Civil Judge, Junior Division, Borivli, District Thana, that the standard rent of the land be determined under section 11 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The Civil Judge rejected the application holding that the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, did not apply to open land let for constructing buildings for residence, education, business, trade or storage. This order was confirmed on September 28, 1955, by a single Judge of the Bombay High Court in a group of revision applications : Mrs. Dossibai N. B. Jeejeebhoy vs Hingoo Manohar Missar : Nos. 233 to 242 of 1955. But in Vinayak Gopal Limaye vs Laxman Kashinath Athavale(1) the High Court of Bombay held that the question whether section 6(1) of the Act applies to any particular lease must be determined on its terms and a building lease in respect of an open plot is not ex (1) I.L.R. 832 cluded from section 6(1) of the Act solely because open land may be used for residence or educational purposes only after a structure is built thereon. Relying upon this judgment, the appellant filed a fresh petition in the Court of the Small Causes, Bombay, for an order determining the standard rent of the premises. The application was filed in the Court of Small Causes because the area in which the land was situated had since been included within the limits of the Greater Bombay area. The Trial Judge rejected the application holding that the question whether to an open piece of land let for the purpose of constructing buildings for residence. education, business or trade section 6 (1) of the Act applied was res judicata since it had been finally decided by the High Court between the same parties in respect of the same land in the earlier proceeding for fixation of standard rent. The order was confirmed by a Bench of the Court,of Small Causes and by the High Court of Bombay. With special leave, the appellant has appealed to this Court. The view expressed by the High Court of Bombay in Mrs. Dossibai N. B. Jeejeebhoy vs Hingoo Manohar Missar (Civil) Revision Application No. 233 of 1955 (decided on September 28, 1955) was overruled by this Court in Mrs. Dossibai N. B. Jeejeebhoy vs Khemchand Gorumal & Others(1). In the latter case the Court affirmed the view expressed by the Bombay High Court in Vinayak Gopal Limaye 's case (2). But all the Courts have held that the earlier decision of the High Court of Bombay between the same parties and relating to the same land is res judicata. Section II of the Code of Civil Procedure which enacts the general rule of res judicata, insofar as it is relevant, provides : "No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court." The Civil judge, Junior Division, Borivli, was competent to try the application for determination of standard rent, and he held that s 6(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, did not apply to open land let for construction of residential and business premises. The rule of res judicata applies if "the matter directly and substantially in issue" in a suit or proceeding was directly and sub (1) I.L.R. (2) 833 stantially in issue in the previous suit between the same parties and had been heard and finally decided by a competent Court. The Civil Judge, Junior Division, Borivli, decided the application between the parties to the present proceeding for determination of standard rent in respect of the same piece of land let for construction of buildings for residential or business purposes. The High Court has held that a decision of a competent Court may operate as res judicata in respect of not only an issue of fact, but mixed issues of law and fact, and even abstract questions of law. It was also assumed by the High Court that a decision relating to the jurisdiction of the Court to entertain or not to entertain a proceeding is binding and conclusive between these parties in respect of the same question in a later proceeding. But the doctrine of res judicata belongs to the domain of procedure : it cannot be exalted to the status of a legislative direction between the parties so as to determine the question relating to the interpretation of enactment affecting the jurisdiction of a Court finally between them, even though no question of fact or mixed question of law and fact and relating to the right in dispute between the parties has been determined thereby. A decision of a competent Court on a matter in issue may be res judicata in another proceeding between the same parties : the "matter in issue" may be an issue of fact, an issue of law, or one of mixed law and fact. An issue of fact or an issue of mixed law and fact decided by a competent court is finally determined between the parties and cannot be re opened between them in another proceeding. The previous decision on a matter in issue alone is res judicata : the reasons for the decision are not res judicata. A matter in issue between the parties is the right claimed by one party and denied by the other, and the claim of right from its very nature depends upon proof of facts and application of the relevant law thereto. A pure question of law unrelated to facts which give rise to a right, cannot be deemed to be a matter in issue. When it is said that a previous decision is res judicata, it is meant that the right claimed has been adjudicated upon and cannot again be placed in contest between the same parties. A previous decision of a competent Court on facts which are the foundation of the right and the relevant law applicable to the determination of the , transaction which is the foundation of the right and the relevant law applicable to the determination of the transactions which is the soured of the right is res judicata. A previous decision on a matter in issue is a composite decision: the decision of law can not be dissociated from the decision on facts on which the right is founded. A decision on an issue of law will be as res judicata in a subsequent proceeding between the same parties, if the cause of action of the subsequent Proceeding be the same as in the previous proceeding, but not when the cause of action is different, nor 834 when the law has since the earlier decision been altered by a competent authority, nor when the decision relates to the jurisdiction of the Court to try the earlier proceeding, nor when the earlier decision declares valid a transaction which is prohibited by law. The authorities on the question whether a decision on a question of, law operates as res judicata disclose widely differing views. In some cases it was decided that a decision on a question of law can never be res judicata in a subsequent proceeding between the same parties : Parthasardhi Ayyangar vs Chinnakrishna Ayyangar(1); Chamanlal vs Bapubhai (2) ; and Kanta Devi vs Kalawati(3). On the other hand Aikman, J., in Chandi Prasad vs Maharaja Mahendra Mahendra Singh(1) held that a decision on a question of law is always res judicata. But as observed by Rankin, C.J., in Tarini Charan Bhattacharjee vs Kedar Nath Haldar(5) : "Questions of law are of all kinds and cannot be dealt with as though they were all the same. Questions of procedure, questions affecting jurisdiction, questions of limitation, may all be questions of law. In such questions the rights of parties are not the only matter for consideration. " We may analyse the illustrative cases retating to questions of law, decisions on which may be deemed res judicata in subsequent proceeding. In Bindeshwari Charan Singh vs Bageshwari Charan Singh(1) the Judicial Committee held that a decision of a court in a previous suit between the same parties that section 12A of the Chota Nagpur Encumbered Estates Act 6 of 1876 which renders void a transaction to which it applies was inapplicable, was Yes judicata. In that case the owner of an impartable estate, after his estate was released from management, executed a maintenance grant in favour of his minor son B, but without the sanction of the Commissioner as required by section 12A of the, Act. B on attaining majority sued his father and brothers for a maintenance grant at the rate of Rs. 4,000 per annum. The claim was decreed, and the plaintiff was awarded a decree for a grant of Rs. 4,000 inclusive of the previous grant of 1909, and the Court held that the grant of 1909 was valid in law. The father implemented the decree and made an additional maintenance grant upto the value of the decreed sum. In an action by the sons of B 's brothers challenging the two grants on the plea that the grants were illegal and not binding upon them, the Judicial Committee held that the plea was barred as res judicata in respect of both the grants in respect of the first because there was an express decision on the validity of the first grant in the earlier suit, and in respect of the second the (1) I.L.R. (3) A.I.R. [1946] Lah. 419. (5) I.L.R. (2) I L.R, (4) I.L.R. 23 All. (6) L.R. 63 I.A. 53. 83 5 decision in the first suit was res judicata as to the validity of the second grant which was made in fulfillment of the obligation under the Court 's decision. The Judicial Committee held that in respect of the first grant, the decision that section 12A did not apply to the grant, was res judicata, and in respect of the second grant the construction between the same parties of section 12A was res judicata. Validity of the second grant was never adjudicated upon in any previous suit; the second grant was held valid because between the parties it was decided that to the grant of maintenance of an impartible zamindari section 12A of the Chota Nagpur Encumbered Estates Act had no application. This part of the judgment of the Judicial Committee is open to doubt. Where the law is altered since the earlier decision, the earlier decision will not operate as res judicata between the same, parties : Tarini Charan Bhattacharjee 's case(1). It is obvious that the matter in issue in a subsequent proceeding is not the same as in the previous proceeding, because the law interpreted is different. In a case relating to levy of tax a decision valuing property or determining liability to tax in a different taxable period or event is binding only in that period or event, and is not binding in the subsequent years, and therefore the rule of, res judicata has no application; see Broken Hill Proprietary Company Ltd. vs Municipal Council of Broken Hill(2) A question of jurisdiction of the Court, or of procedure, or a pure question of law unrelated to the right of the parties to a previous suit, is not res judicata in the subsequent suit. Rankin, observed in Tarini Charan Bhattacharjee 's case(1) : "The object of the doctrine of res judicata is not to fasten upon parties special principles of law as applicable to them inter se, but to ascertain their rights and the facts upon which these rights directly and substantially depend; and to prevent this ascertainment from becoming nugatory by precluding the parties from reopening or recontesting that which has 'been finally decided. " A question relating to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court. If by an erroneous interpretation of the statute the Court holds that it has no jurisdiction, the question would not, in our judgment, operate as res judicata. Similarly by an erroneous decision if the Court assumes jurisdiction which it does. not possess under the statute, the question cannot operate as res judicata bet (1) I.L.R. (2) 83 6 ween the same parties, whether the cause of action in the subsequent litigation is the same or otherwise. It is true that in determining the application of the rule of res judicata the Court is not concerned with the correctness or otherwise of the earlier judgment. The matter in issue, if it is one purely of fact, decided in the earlier proceeding by a competent court must in a subsequent litigation between the same parties be regarded as finally decided and cannot be, reopened. A mixed question of law and fact determined in the earlier proceeding between the same parties may not, for the same reason, be questioned a subsequent proceeding between the same parties. But, where the decision is on a question law, i.e. the interpretation of a statute, it will be res judicata in a subsequent proceeding between the same parties where the cause of action is the same for the expression "the matter in issue" in section 11 Code of Civil Procedure means the right litigated between the parties, i.e. the facts on which the right is claimed or denied and the law applicable to the determination of that issue. Where, however, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule of res judicata a party affected by the decision will not be precluded from challenging the validity of that order under the rule of res judicata,for a rule of procedure cannot supersede the law of the land. In the present case the decision of the Civil Judge, Junior Division, Borivli, that he had no jurisdiction to entertain the application for determination of standard rent, is, in view of the judgment of this Court, plainly erroneous : see Mrs. Dossibai N. B. Jeejeebhoy vs Khemchand Gorumal & Others(1) If the decision in the previous proceeding be. regarded as conclusive it will assume the status of a special rule of law applicable to the parties relating to the jurisdiction 'of the Court in derogation of the rule declared by the Legislature. The appeals are allowed, and the orders passed by the High Court and the Court of Small Causes are set aside and the proceedings are remanded to the Court of First Instance to deal with and dispose them of in accordance with law. There will be no order as to costs throughout. Y.P. Appeals allowed.

The appellant obtained lease of an open land for construction of buildings. After the constructions, the appellant applied for determination of standard rent under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The application was rejected holding that the provi sions of the Act did not apply to open land let for construction. This view was confirmed by the High Court. Sometime thereafter in another case the High Court held that the question whether the provisions of the Act applied to any particular lease must be determined on its terms and a building lease in respect of an open plot was not excluded from the provisions of the Act solely because open land may be used from residence or educational purposes only after a structure is built thereon. Relying upon this judgment, the appellant filed a fresh application for determining the standard rent. The Trial Judge rejected the application holding that question of the applicability of the Act was res judicata since it had been finally decided by the High Court between the same parties in respect of the same land in the earlier proceeding for fixation of standard rent. The order was confirmed by first appellate court and on further appeal by the High Court. HELD:The judgment did not operate as res judicata. A question relating. to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court. If by an erroneous interpretation of the statute the court holds that it has no jurisdiction, the decision will not, operate as res judicata. Similarly by an erroneous decision if the Court assumes jurisdiction which it does not possess under the statute, the decision will not operate as res judicata between the same parties, whether the cause of action in the subsequent litigation is the same or otherwise. in determining the application of the rule of res judicata the court is not concerned with the correctness or otherwise of the earlier judgment. The matter in issue, if it is one purely of fact, decided in the earlier proceeding by a competent court must in a subsequent litigation between the same parties be regarded as finally decided and cannot be reopened. A mixed question of law and fact determined in the earlier proceeding between the same parties may not, for the same reason, be questioned in a subsequent proceeding between the same parties where the cause of action is the same, for the expression "the matter in issue" in section 11, Code of Civil Procedure means the right litigated between the parties, i.e., the facts on which the right is claimed or denied and the law applicable to the determination of that issue. Where, however, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule of res judicata a party affected by the decision will not be precluded_ from challenging the validity of that order because of the rule of res judicata, for a rule of procedure cannot supersede the law of the land. 83 1 if the decision in the previous proceeding be regarded as conclusive it will assume the status of a special rule of law applicable to the parties relating to the jurisdiction of_the Court, in derogation of the rule declared by the Legislature. [835G 836 F] Parthasardhi Ayyangar vs Chinnakrishna Ayyangar, I.L.R. , Chamanlal vs Bapubhai, I.L.R. , Kanta Devi vs Kalawati, A.I.R. 1946 Lah. 419,, Tarini Charan Bhattacharjee vs Kedar Nath Haldar, I.L.R. , and Broken Hill Proprietary Company Ltd. vs Municipal Council of Broken Hill, , approved. Chandi Prasad vs Maharaja Mahendra Mahendra Singh, I.L.R. 23 All. ,5, disapproved. Bindeshwari Charan Singh vs Bageshwari, Charan Singh, L.R. 63 I.A. 53, doubted.

Appeal No. 1456 of1966. Appeal from the judgment ,and order dated April 6, 1964 of the Gujarat High Court in Letters Patent Appeal No. 8 of 1960. D.U. Shah, P.C. Bhartari and J.B. Dadachanji, for the ' appellants. S.K. Dholakis and Vineet Kumar, for respondents Nos. 1 (a) to 1(e)and (g). The Judgment of the Court was delivered by Shah, J. The facts which give rise to these appeal are few and simple. The appellant commenced on May 3, 1951 an action in the Court of the Assistant Judge, Morvi, in the former Part 'B ' State of Saurashtra for a decree for Rs. 9,387/5/ against one L. Angha Nathu Jamal and respondents 2 & 3 in this appeal. The Trial Court decreed the suit on October 17, 1955. An appeal was filed against the decree in the High Court of Saurashtra at Rajkot. On November 1, 1956, the High Court of Saurashtra was abolished and the proceedings pending in that Court stood ' transferred to the High Court of Bombay. On February 21,. 436 1958, Vyas, J., of the High Court of Bombay allowed the appeal. Against that order an appeal under C1. 15 of the Letters Patent of the High Court of Bombay was filed by the plaintiff but without an order of Vyas, J. certifying that the case was fit for appeal to a Division Bench of the High Court. On May 1, 1960 under the Bombay Reorganisation Act 1960, the appeal stood transferred to the High Court of Gujarat. The High Court of Gujarat held that the appeal was incompetent in the absence of an order under section 22A of the Saurashtra Ordinance 2 of 1948 certifying that the case was fit for appeal to a Division Bench. With certificate granted by the High Court of Gujarat this appeal has been preferred. The Rulers of Indian States in Kathiawar agreed "to unite and integrate" their territories in one State to be styled the United State of Saurashtra with a common executive, legislature and judiciary. By Ordinance 1 of 1948 the administration of the covenanting States was taken over by the Rajpramukh. The Rajpramukh issued, in exercise of power reserved to him by article 9 el. (3) of the Covenant, Ordinance 2 of 1948 setting up with effect from February 29, 1948, a High Court of Judicature for the State of Saurashtra. The expression "High Court" was defined in section 3(c) as meaning "the High Court established and constituted by this Ordinance and functioning as the High Court of the Saurashtra State. By section 21 the High Court was to be the highest Court of appeal and revision in the State and to have jurisdiction to maintain and dispose of such appeals, revision and other cases, civil or criminal, as it may be empowered to do under the Ordinance or any enactment in force in the State. By section 22 the High Court was also to be a Court of reference with power to hear, revise and determine all eases referred to it. By Ordinance 5 of 1950 section 22A was added: it vas provided thereby: "( 1 ) Except as otherwise provided by any enactment for the time being in force, an appeal from any original decree, or from any. order against which an appeal is permitted by any law for the time being in force, or from any order under Article 226 of the Constitution of India, made by a single Judge of the High Court, shall lie to a Bench consisting of two other Judges of the High Court. (2) An appeal shall lie from a judgment of one Judge of the High Court in respect of a decree or order made in exercise of Appellate; Jurisdiction to a Bench consisting of two other Judges of the High Court if the Judge who made the decree or order certifies that the case is a fit one for appeal:" 437 Under the Constitution of India, the territory of the United State of Saurashtra was formed into a Part 'B ' State of Saurashtra. By the the territory of the State of Saurashtra merged into the State of Bombay. By section 49 of the States Reorganization Act, 1956, it was enacted that the High Court exercising immediately before the appointed day, jurisdiction in relation to the existing State of Bombay shall, as from the appointed day, be deemed to be the High Court for the new State of Bombay. By section 50(1) as from the appointed day, the High Courts of all the existing Part B States (with certain exceptions not material) were to cease to function and were abolished. By section 52 was provided: "The High Court for a new State shall have, in respect of any part of the territories included in that new State, all such original, appellate and other jurisdiction as, under the law in force immediately before the appointed day, is exercisable in respect of that part of the said territories by any High Court or Judicial Commissioner 's Court for an existing State". By section 54 it was provided: "Subject to the provisions of this Part, the law in force immediately before the appointed day with respect to practice and procedure in the High Court for the corresponding State shall, with the necessary modifications, apply in relation to the High Court for a new State, and accordingly, the High Court for the new State shall have all such powers to make rules 'and orders with respect to practice and procedure as are, immediately, before the appointed day, exercisable by the High Court, for the corresponding State: Provided that any rules or orders which are in force immediately before the appointed day with respect to practice and procedure in the High Court for the corresponding State shall, until varied or revoked by rules or orders made by the High Court for a new State, apply with the necessary modifications in relation to practice and procedure in the High Court for the new State as if made by that Court". Section 59(3) provided that all proceedings pending in the High Court of Saurashtra or in the Court of the Judicial Commissioner for Kutch immediately before the appointed day shall stand transferred to the High Court of Bombay. By section 119 it was provided: "The provisions of Part II shall not be deemed to have effected any change in the territories to which any L2Sup .CI/70 6 438 law in force immediately before the appointed day extends or applies, and territorial references in any such law to an existing State shall, until otherwise provided by a competent Legislature or other competent authority, be construed as meaning the territories within that State immediately before the appointed day." Section 127 provided: "The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law. " In exercise of the power conferred upon the Central Government by section 120 of the , the Saurashtra (Adaptation of Laws on Union Subjects) Order, 1957, was promulgated by the Central Govt. By cl. 3 of the order it was provided that Saurashtra Ordinance 2 of 1948 shall stand repealed with effect from November 1, 1956. The High Court of Bombay for the new State added rr. 252 A and 252 B to the Rules of the High Court of Judicature at Bombay, Appellate Side, 1950. By r. 252 A it was provided: "Rules and orders relating to. practice and procedure in the High Court in force immediately prior to the appointed day in the High Court of Bombay shall, subject to. modifications made from time to time thereto, apply to the practice and procedure in the High Court. " Rule 252 B provided: "Rules and orders relating to practice and procedure in the High Court framed by the High Courts of Nagpur, Hyderabad and Saurashtra and Judicial Commissioner 's Court, Kutch, shall stand abrogated as from the 1st November 1956 in the areas of the new State of Bombay which before the 1st November 1956 were parts of the States of Madhya Pradesh, Hyderabad, Saurashtra and Kutch." The High Court of Gujarat held that the appeal filed by the respondents in the High Court of Saurashtra against the judgment of the Assistant Judge, was and continued to remain subject to the provisions of section 22A of Saurashtra Ordinance 2 of 1948 and an appeal could lie against the decision of Vyas J., only if he certified that the case was fit for appeal to a Division Bench. Clause 15 of the Letters Patent of the Bombay High Court provided: "And we do further ordain that an appeal shall lie to the said High Court of Judicature at Fort William in Bengal from the judgment (not being a judgment passed in the exercise of appellate jurisdiction in respect of a 439 decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court, and not being an order made in the exercise of revisional jurisdiction and not being a sentence or order passed or made in the exercise of the power of superintendence under the provisions of section 107 of the Government of India Act or in the exercise of criminal jurisdiction) of one Judge of the said High Court or one Judge of any Division Court, pursuant to section 108 of the Government of India ACt, and that notwithstanding anything hereinbefore provided an appeal shall lie to the said High Court from a judgment of one Judge of the said High Court or one Judge of any Division Court, pursuant to section 108 of the Government of India Act made on or after the; first day of February 1929) in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court, where the Judge who passed the judgment declares that the same is a fit one for appeal; but . .right of appeal from other judgments of Judges of the said High Court or of such Division Court shall be to Us, Our Heirs or Succes SOTS. " By cl. 15 of the Letters Patent a judgment in an appeal from a civil suit by a single Judge of the High Court of Bombay is subject to appeal to a Division Bench except when the order is made in exercise of the revisional jurisdiction of the Court or in second appeal, or in exercise of criminal jurisdiction, or in exercise of power of superintendence under section 107 of the Government of India Act, 1935 (article 227 of the Constitution). Vyas, J, decided the appeal sitting as a Judge of the High Court of Bombay. Prima facie, his judgment delivered in a first appeal from a judgment of the subordinate court was subject to appeal 0 a Division Bench of the High Court of Bombay. There was clearly an inconsistency between section 22A of the Saurashtra Ordinance 2 of 1948, and cl. 15 of the Letters Patent of the High Court of Bombay. By virtue of section 22A(2) an appeal lay to a Division Bench of the Saurashtra High Court from a judgment of one Judge "in respect of a decree or order made in exercise of Appellate Jurisdiction when the Judge who made the decree or order certified that the case is a fit one. for appeal". The Legislature made no distinction between a first appeal, a second appeal, an appeal from order land an application in exercise of revisional jurisdiction. But an appeal under cl. 15 of the 440 Letters Patent of the High Court of Bombay in be appeal from filed without the judgment of the Court of First Instance could a certificate of the Judge hearing the appeal. The right to appeal from a decree or order is a substantive right. As a corollary thereto, the right to maintain a decree of a Court without interference by a superior Court and subject only to the limitation therein is also a vested right and may be taken away by express enactment or clear implication of the amending statute. In Colonial Sugar Refining Company vs Irving(x) the Judicial Committee held that a provision which deprives a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right does not regulate procedure. The Australian Commonwealth Judiciary Act, 1903, came into force on August 25, 1903. Against the judgment of the Supreme Court of Queens land in an action commenced on Act. 25, 1902, an application was made for leave to appeal to the Judicial Committee and leave was granted on September 4, 1903. At the hearing of the appeal by the Judicial Committee the respondents applied that the appeal from the judgment of the Supreme Court of Queensland be dismissed on the ground that the power of the Court below to give leave to ,appeal stood abrogated by section 39 of the Australian Commonwealth Judiciary Act, 1903. The application was rejected by the Judicial Committee. Lord Macnaghten observed: As regards the general principles applicable to the case there was no controversy. On the one hand it was not disputed that if the matter in question be a matter of procedure only, the petition (to dismiss) is well founded. On the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Judiciary Act, it was conceded that in accordance with a long line of authorities from the time of Lord Coke to the present day the appellants (the Sugar Co.) would be entitled to succeed. The Judiciary Act is not retrospective by express enactment or by necessary intendment. And therefore, the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure ? .It seems to their Lordships that the question does not admit of doubt. To deprive. a sui tor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure". (1) 441 In Garikapatti Veeraya vs N. Subbiah ChoudhurY(1), this Court accepted the principle in Colonial Sugar Refining Company 's case(2). In the absence of any provision to the contrary, there fore, a right attached to the action when it was commenced in 1951, that an appeal against the decision of a single Judge of the High Court of Saurashtra shall lie only if the Judge deciding the case certified the case to be a fit one for appeal. But the Saurashtra High Court was abolished from November 1, 1956 and the jurisdiction of the Saurashtra High Court was conferred upon the Bombay High Court. The case was tried by Vyas, J., not as a Judge of the Saurashtra High Court but as a Judge of the High Court of Bombay. In terms the restriction placed by section 22A applies to a judgment of one of the Judges of the High Court of Saurashtra: it does not apply to a judgment of a Judge of the High Court of Bombay. Once the Saurashtra Ordinance 2 of 1948 was repealed and the jurisdiction to try the appeal was conferred upon the High ' Court of Bombay, the right of appeal exercisable by the parties to the litigation decided by the High Court of Bombay was governed by the Letters Patent of that court had not by section 22A of the Saurashtra Ordinance 2 of 1948. Granting that the incident prescribed by section 22A continued to attach to the action, in terms section 22A of the Saurashtra Ordinance could not operate to restrict a right of appeal exercisable by cl. 15 of the Letters Patent governing the judgments of the Judges of the High Court of Bombay. The expression "Judge of the High Court" in section 22A of the ordinance for the ' purpose of giving effect to the rule in Colonial Sugar Refining Company 's case(2) cannot be read as meaning a Judge of the High Court of Bombay. By the clearest implication of the repeal by the Saurashtra (Adaptation of Laws on Union subjects) Order, 1957, promulgated by the Central Government and by the application of cl. 15 of the Letters Patent of the Bombay High Court, the judgment of Vyas, J., was subject to appeal to a Division Bench without an order of the Learned judge certifying the case to be fit for appeal. In support of his submission counsel for the respondents relied upon the terms of section 52 of the . But that section only confers upon the High Court of Bombay after November 1, 1956 the original, appellate and other jurisdiction, which was exercisable by the High Court of Saurashtra immediately prior to November 1, 1956, in respect of the territories within the State of Saurashtra. The section does not incorporate either expressly or by implication the limitations prescribed by section 22A(2) of Saurashtra Ordinance 2 of 1948 into the Letters Patent of the High Court of Bombay. The jurisdiction original, appellate and other which the High Court of Saurashtra could exercise prior to November 1, 1956, survived to the High Court (1) ; (2)[1905] A.C.360. 442 of Bombay in respect of the territories of the State of Saurashtra, and the appeal filed by the respondent before the High Court of Saurashtra was triable in the exercise of the appellate jurisdiction of the High Court of Bombay, after the case stood transferred to that Court by virtue of sub section (3) of section 59 of the States Reorganization Act, 1956. Vyas, J., functioned as a Judge of the High Court of Bombay and his judgments in first appeals were, in the absence of an express provision to the contrary, subject to appeal under cl. 15 of the Letters Patent to a Division Bench without a certificate. The High Court of Gujarat was right in holding that in respect of the areas of the former Saurashtra State, the High Court Bombay acquired the same jurisdiction which the High Court of Saurashtra possessed. That however, does not mean that the jurisdiction was to be regulated "with reference to the law which was in force on the appointed day i.e. November 1, 1956". Section 52 of the preserved the original, appellate and other jurisdiction as under the law in force immediately before the appointed day exercisable in respect of the territories within the State of Saurashtra. Unless in the exercise that jurisdiction any restriction under the law then in force was by express provision or by clear implication preserved, the provisions of cl. 15 of the Letters Patent must apply. It is necessary to recall the provisions of section 57 of the , which provide that the law in force immediately before the appointed day relating to the powers of the Chief Justice, single Judges and division courts of the High Court for the corresponding State and with respect to matters ancillary to the exercise of the powers shall, with the necessary modification, apply in relation to the High Court for a new State. Immediately before November 1, 1956, against the judgment of a single Judge of the High Court of Bombay exercising power in a first appeal, an appeal lay to a Division Bench without a certificate. The power of a Division Bench to entertain an appeal continued to remain exercisable by the Judges of the Bombay High Court when dealing with cases transferred under section 59(3) to the Bombay High Court from the Saurashtra High Court. In terms section 57 provides that powers of the Division Bench of the High Court for the corresponding State i.e. the new State of Bombay shall be the same as the powers of the Division Bench under the law in force immediately before the appointed day in the State of Bombay. A Division Bench of the High Court of BOmbay was competent to entertain an appeal against the judgment of a single Judge deciding a first appeal from the decision of a subordinate court without a certificate of the Judge deciding the appeal. 443 The High Court of Gujarat have made a distinction between 'power" and "jurisdiction", and they have held that when section 52 of the , enacts that the appellate jurisdiction of the High Court of Bombay for the new State of Bombay shall in relation to the Saurashtra area be the same as the jurisdiction which the Saurashtra High Court possessed, it is meant that the High Court of Bombay has the same jurisdiction which the High Court of Saurashtra originally had, and in exercise of that jurisdiction is subject to the same limitations which the High Court of Saurashtra was subject. We are unable to agree with that view. Section 52 of the States Reorganization Act, 1956, does not say so, and section 57 of that Act provides to the contrary. The High Court of Gujarat was also of the view that section 52 of the "crystalizes the law" only with respect to the territorial jurisdiction of each of the areas comprised in the High Court of Bombay, and if the Legislature extended the jurisdiction of the High Court of Bombay and also retained the jurisdiction which the abolished High Court possessed, the result would be "odd and conflicting" there being conflict of jurisdiction. But that, in our judgment, is a ground for holding that the jurisdiction of the Bombay High Court superseded in case of conflict, the restrictions on the exercise of jurisdiction by the original High Court qua the Saurashtra territory, and not that the jurisdiction of the High Court of Bombay was because of some unexpressed limitation restricted. The High Court of Gujarat recognised that the conclusion to which they had reached revealed a defect in the administration of justice. They observed: "The Legislature may have had a good reason for preserving in tact the old jurisdiction of the Saurashtra High Court in regard to pending cases. However, our conclusion affects cases instituted after the Reorganisation Act came into force. In our judgment, there is no reason why the litigants from the Saurashtra and Kutch areas should now be treated on a different footing from the litigants in the old Bombay area. In our judgment, the rights of appeal of litigants in all the areas should now be placed on the same footing. live would recommend to the authorities concerned to examine this question and, if so advised, to undertake the necessary legislation so as to confer the same rights of appeal to the litigants from the Saurashtra & Kutch areas as are given to the litigants from the rest of the State of Gujarat. " 444 In our view the conclusion that the restriction on the "old jurisdiction of the Saurashtra High Court" in regard to. pending cases was preserved by section 52 is erroneous. _ The does not purport to. preserve the restrictions upon the exercise of jurisdiction, and no implication arises from the use of the expression "original, appellate and other jurisdiction as under the law in force immediately before the appointed day", that the limitations upon the exercise of the jurisdiction which were existing prior to November 1, 1956, notwithstanding the provisions of section 57 of the were preserved. The order passed by the High Court of Gujarat is set aside, and the case is remanded to the High Court to be re entered under the original number and to be heard and disposed of according to law. Costs wilt be costs in the High Court. V.P.S. Appeal allowed and case remanded.

Under section 22A(2) of the Saurashtra Ordinance No. 2 of 1948, an appeal lay to a Division Bench of the Saurashtra High Court Tom a judgment of a single Judge of that High Court in the exercise of its appellate jurisdiction, if the Judge certified that the, case was a fit one for appeal. The , merged the Part 'B ' State of Saurashtra into the State of Bombay, abolished the High Court of Saurashtra as from November 1, 1956, and transferred the proceedings pending before the High Court of Saurashtra to the High Court of Bombay. Section 52 of the Act conferred upon the High Court of Bombay, after November 1, 1956, the original, appellate and other jurisdiction which was exercised by the High Court of Saurashtra immediately prior to that date in respect of the territories in the State of Saurashtra. The Saurashtra Ordinance No. 2 of 1948 was repealed with effect from November 1. 1956. by the Saurashtra (Adaptation of Laws on Union Subjects Order, 1957. and the Rules and orders relating to practice and procedure framed by the High Court of Saurashtra were abrogated as from November 1, 1956 by rules of the High Court of Bombay made under section 54 of the State Reorganisation Act. The effect of section 57 of the is that the powers of a Division Bench of the High Court for the new State of Bombay shall be the same as the powers of the Division Bench under the law in force immediately before November 1, 1956, in the State of Bombay. Clause 15 of the Letters Patent of the High Court of Bombay, which was law in force immediately before November 1. 1956, in the State of Bombay, provides that an appeal from the judgment of a single Judge of the Bombay High Court, in a first appeal from a judgment of the Subordinate Court, could be filed without a certificate of the Judge hearing the first appeal. Clause 15 of the Letters Patent of the Bombay High Court applied also to the Gujarat High Court which was established as a result of the Bombay Reoganisation Act. A first appeal against a decree of a subordinate court in Saurashtra, pending in the Saurashtra High Court on November 1, 1956, was transferred to the High Court of Bombay, and disposed of by a single Judge of the Bombay High Court. 'An appeal to the Division Bench under CI. 15 of the Letters Patent of the High Court of Bombay, was transferred to the Gujarat High Court after its establishment, but the Gujarat High Court held that the appeal was incompetent under section 22A of the Saurashtra Ordinance No. 2. of 1948 without a certificate from the single Judge. 435 In appeal to this Court, HELD: (1) It was only in the absence of any provision to the contrary, that a right attached to the action when it was commenced in the subordinate court in Saurashtra that an appeal against the decision of the single Judge of the High Court of Saurashtra in appeal, shall lie only if the single. judge certified that it was a fit case for appeal to a Division Bench. Garikapatti Veerayya vs N. Subbiah Choudhury; , , referred to. [443 A B]. (2) But, from November 1, 1956, the Saurashtra High Court was abolished, the Saurashtra Ordinance No. 2 of 1948 was repealed, and the jurisdiction of the High Court of Saurashtra was conferred upon the Bombay High Court. Therefore, the single Judge of the High Court who heard the first appeal, heard it not as a Judge of the Saurashtra High Court, but as a Judge of the Bombay Court. [443 B C] (3) Section52 of the does not mean that the jurisdiction conferred upon the Bombay High Court in respect of the territories within the State of Saurashtra was to be regulated with reference to the law which was in force on November 1, 1956 in Saurashtra. Therefore, it does not incorporate either expressly or by implication the limitations prescribed by section 22A(2) of the Saurashtra Ordinance into the Letters Patent of the High Court. [443 G H; 444 C D] (4) Since the restriction placed by section 22A of the Ordinance applied only to a judgment of a single Judge of the High Court of Saurashtra and could not apply to a judgment of a single Judge of the Bombay High Court, and could not operate to restrict a right of appeal exercisable under CI. 15 ' of the Letters Patent, the judgment of the single Judge of the Bombay High Court was, under section 57 of the , subject to appeal to a Division Bench without a certificate of the single Judge. [443 D F]

Civil Appeals Nos. 459 and 460 of 1960 Appeals by special leave from the award dated March 10, 1959, of the Industrial Tribunal, Assam, in Reference No. 16 of 1958. M. C. Setalvad, Attorney General for India, B. Sen, section N. Mukherji and B. N. Ghosh, for the management appellant (in C. A. No. 459 of 60) and the respondent (in C. A. No. 460 of 1960). section T. Desai, A. K. Dutt and Janardan Sharma, for the workmen respondents (in C. A. No. 459 of 60) and the appellants (in C. A. No. 460 of 1960). November 24. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. Civil Appeals Nos. 459 and 460 of 1960 are cross appeals and they arise out of an award pronounced by the Industrial Tribunal, Assam, in an industrial dispute referred by the Assam Government for its adjudication. This industrial dispute was raised against the management of the Tocklai Experimental Station (hereafter called the Station) by its workmen. Six out of the demands made by the workmen formed the subject matter of reference. In the present appeals we are concerned with three of them. Demand No. 1 (a) was that the employees ' junior staff of the Station should be given pension in lieu of the existing practice of paying gratuity. This demand has been rejected be the tribunal. The other demand made by the employees was No. 3(b) and it had reference to the claim for free housing accommodation or adequate allowance in lieu thereof. This demand has been partially allowed by the tribunal and it has directed that house allowance in each case shall be raised at the flat rate of Rs. 20/ instead of Rs. 101/ . The decision of the tribunal in respect of these two demands did not satisfy the workmen and so by special leave of this Court they have filed Civil Appeal No. 460 of 1960. The demand of the 560 junior staff for bonus which was resisted by the Station has been partially allowed by the tribunal. It has ordered that the Station shall give punja bonus at the same rate as the employees working for the Indian Tea Association at Calcutta are getting. This part of the award is challenged by the Station in its appeal by special leave by Civil Appeal No. 459 of 1960. That is how the two cross appeals arise. We will deal first with the Station 's Appeal in respect of bonus. The learned Attorney General contends that in making the demand for bonus the workmen have entirely misconceived the true position of the industrial law on the point, and he argues that the Assam Government was not justified in making the reference in the form it has been made and the tribunal was not justified in making the award in the manner it has done. The workmen made their demand for bonus in these words: "The Union requests the introduction of bonus for the Tocklai Staff on the following grounds". Then follow six grounds. It was urged that the Station is an arm of the tea industry and is maintained by the members of the I.T.A. who give bonus to their employees, that the Station exists and works for the advancement of the tea industry and increasing its profits and thus is an industry, that the I.T.A. employees at Calcutta office are given bonus, that the employees of the Bengal Chamber of Commerce receive bonus, that the employees of Shamshernagar and Tulsipara branches of this very Station used to be given bonus so long as these branches were functioning and that the personnel of the scientific research laboratories attached to many industrial concerns receive bonus, and so the workmen in the present case were entitled to make a claim in that behalf. In appreciating this claim it is necessary to state that the Station is a research institution established by the Indian Tea Association to make research for the purpose of improving the quality of 561 tea and its production and the said Station is managed by the parent Association and is maintained by means of voluntary subscriptions from members of the said Association. Broadly stated the ground on which the workmen claimed bonus was that the employees of the Association were receiving bonus and that the personnel of scientific research laboratories similarly situated in other industrial concerns were also given bonus. When the Assam Government made the present reference it included within the scope of the reference this claim of bonus along with the other claims made by the workmen. The issue referred for adjudication on this point was thus framed: "2(a). Whether the demand of the employees (Junior Staff) for bonus is justified ? If so, at what rate should the same be paid ?" The tribunal considered this demand and partially allowed it by directing that the workmen should be paid puja bonus at the same rate as the employees working in the I.T.A. at Calcutta are getting. In dealing with this question the tribunal has held that the Station is an industry within the meaning of the Industrial Disputes Act and so it could not resist the demand made by its workmen on the ground that it is an academic body devoted to research and as such outside the purview of the Act. This position is not disputed before us by the Station because it is concluded by a decision of this Court in The Ahmedabad Textile Industry 's Research Association vs The State of Bombay (1). The tribunal has, however, found in favour of the Station that it would be inexpedient, if not impossible, to apply the formula which governs the decision of industrial claims for the payment of bonus. "There are obvious difficulties", says the tribunal, "in applying the formula laid down by their Lordships of the Supreme Court to an experimental station run 562 by the Association"; but it added that "it could not be overlooked that payment of bonus to members of the experimental staff is being made by some companies". Then the tribunal referred to some instances where bonus is paid to workmen who, in the opinion of the tribunal, were similarly situated, and it came to the conclusion that refusing the workmen 's claim for bonus against the Station would amount to discrimination. The tribunal then took into account the fact that what is described as puja bonus is paid to members of the staff of the Bengal Chamber of Commerce because it was admitted before it that the junior staff of the Bengal Chamber of Commerce which presumably was also serving the I.T.A. at Calcutta was receiving a fixed annual gratuity characterised as puja bonus. The tribunal conceded that the claim for this kind of bonus "may not directly satisfy the requirements of law", but it added that "the fact that what was described as puja bonus was given at the sub stations and is also given to the clerical staff working at the I.T.A. at Calcutta, supports the demand to this extent at least that the same treatment may be meted out to them. " It is on this reasoning that the tribunal ultimately made the award in favour of the workmen directing the Station to pay puja bonus to its employees. It would be noticed that the demand originally made by the workmen appears to be in the nature of a demand for bonus which is usually described as industrial profit bonus the payment of which is governed by the application of the well known formula. Such a demand is invariably made, and has to be made, by reference to a particular year because the formula which determines claims for profit bonus postulates the examination of the available surplus in the hands of the employer from which bonus may be directed to be paid to the employees. A claim for profit bonus cannot 563 be validly made unless a specific year for which the claim is made is indicated and it is alleged that there is available surplus in the hands of the employer during that year. It is unfortunate that this elementary aspect was overlooked by the workmen when they made the claim and has not been noticed even by the Assam Government when it made the reference in respect of this claim. This serious infirmity in the claim is present even in the award made by the tribunal because the award does not say for what year the bonus should be paid, and like the claim made by the workmen in very general terms for the introduction of bonus the award also seems to make a direction in similar terms for the payment of bonus. In our opinion, this is a patent infirmity in the award. Profit bonus, it is hardly necessary to emphasise, can be awarded only by reference to a relevant year and a claim for such bonus has, therefore, to be made from year to year and has to be settled either amicably between the parties or, if a reference is made, it has to be determined by industrial adjudication. A general claim for the introduction of profit bonus cannot be made or entertained in the form in which it has been done in the present proceedings. Besides, the other serious infirmity in the award is that when a claim for profit bonus was made the tribunal has proceeded to grant puja bonus and that too solely on the ground that the refusal to grant the said claim would amount to discrimination. In our opinion, the approach adopted by the tribunal in dealing with this alternative claim for puja bonus which was not made in the demand and which had not been expressly referred to the tribunal is entirely erroneous. The claim for puja bonus proceeds on entirely different considerations. Customary puja bonus undoubtedly prevails in many industries in Bengal but there are certain tests which have to be applied in 564 determining the validity of the claim. The amount by of way of puja bonus, it must be shown, has been consistently paid by the employer to his employees from year to year at the same rate, that it has been paid even in years of loss and that it has no relation to the profit made by the employer during the relevant year. The course of conduct spreading over a reasonably long period between the employer and the employees in the matter of payment of puja bonus is of considerable importance in dealing with the claim of customary puja bonus [Vide: The Graham Trading Co. (India) Ltd. vs Its Workmen (1)]. A claim for puja bonus can also be made in a proper case of the ground that the payment of such bonus is an implied term in the contract of employment [Vide: Messrs. Ispahani Ltd., Calcutta vs Ispahani Employees ' Union(2). Such a claim again would necessarily involve the consideration of several relevant facts none of which has been alleged or proved in the present proceedings. Therefore, the decision of the tribunal awarding puja bonus to the workmen cannot be sustained. Indeed, in awarding puja bonus to the workmen the tribunal has failed to consider that it was making out an entirely new and inconsistent case for the workmen and granting the said claim without any proof of the relevant facts which would support such a claim. It is rather surprising that even when the tribunal by its award wanted to grant the demand for puja bonus it did not think it necessary to clarify at what rate the said bonus was to be paid. The award is absolutely vague in that behalf and that is another infirmity in the award. Since that is the only point in Civil Appeal No. 459 of 1960 preferred by the Station we must hold that the appeal succeeds and must set aside the award made by the tribunal under issue No. 1 (a). Before we part with this appeal, however, we ought to add that after special leave was granted 565 to the Station to prefer its appeal it applied for stay of the award directing the payment of puja bonus and stay was granted by this Court on condition that the amount of puja bonus should be paid by the Station to its employees on their furnishing security to the satisfaction of the management. Accordingly the Station has paid to its workmen puja bonus for three years. We suggested to the learned Attorney General that in case his appeal were to succeed the Station may consider whether it would partially forego its claim to recover the amount already paid by it to its workmen, and the learned Attorney General, after consulting his client, has stated before us that the Station would forego one third of the total amount paid by it to its employees under the orders of this Court. This one third amount, we were told, is in the neighborhood of Rs. 65,000/ The learned Attorney General also stated that the balance of two third amount which it would recover from its employees can be paid by each one of them either by easy instalments or at the time when he would receive his gratuity or provident fund; the employee may exercise his option in that behalf. It appears that some of the employees who received the said amount have left the service of the Station and at that time have refunded the amount received by them. The Station would be prepared to give back to such employees one third of the said amount. In our opinion, the attitude adopted by the Station in this matter is very fair and it would relieve the workmen from their liability to return one third of the total amount received by them in pursuance of the orders of this Court. That takes us to Civil Appeal No. 460 of 1960 preferred by the workmen. Mr. section T. Desai, who argued this appeal, could not seriously press the workmen 's case against the refusal of the tribunal to allow their demand for pension in lieu of the existing practice of paying gratuity. On a consideration 566 of the relevant facts the tribunal came to the conclusion that this demand was not justified, and, in our opinion the conclusion of the tribunal is well founded. Then, as regards the other demand which is the subject matter of the appeal the tribunal has increased the house allowance at a flat rate of Rs. 20/ instead of Rs. 10/ and this increased rate has been paid by the Station as from the date when the award became enforceable. Mr. Desai contends that the tribunal should have made an award granting the demand for accommodation or in the alternative should have awarded larger amount by way of house allowance. We are not impressed by this argument. A demand for the provision of housing accommodation can be reasonably entertained where it appears that the financial position of the employer can bear the burden involved in the said demand. Under the present economic conditions prevailing in the industry the responsibility for providing housing accommodation cannot reasonably be placed solely on the shoulders of the employer. In due course the problem may have to be tackled by the industry in co operation with the State. The State will have to bear a part of that responsibility [Vide: The Patna Electric Supply Co. Ltd., Patna vs The Patna Electric Supply Workers ' Union (1))]. The tribunal has considered the financial position of the Station, the urgency of the damned made by the workmen, and has come to the conclusion that the demand for housing accommodation was not justified and that the ends of social justices would be met in the present case if a flat rate of enhancement of Rs. 20/ is awarded. It is true that the Station gives housing accommodation for members of the senior staff but as the tribunal has pointed out there are special reasons how more favourable terms have to be offered to senior research staff in order to get the services of properly trained and properly equipped personnel. In our opinion, the tribunal was right in refusing 567 to draw an analogy between the requirements of the senior research staff and the junior staff with whose claims the tribunal was dealing. Therefore, we are not satisfied that there is any substance in the grievance made by the workmen against the award passed by the tribunal in respect of house allowance. The result is Civil Appeal No. 460 of 1960 fails and is dismissed. There would be no order as to costs in both the appeals. Appeal No. 459 allowed. Appeal No. 460 dismissed.

The appellant, a research institution established for the purpose of improving the quality of tea, was managed by the India Tea Assciation. The employees made claims, inter 558 alia, for (1) free housing accommodation or adequate allowance in lieu thereof, and (2) grant of bonus. The tribunal, to which the matter was referred by the Government considered the financial position of the appellant and came to the conclusion that the demand for housing accommodation was not justified and that the ends of justice would be met if a flat rate of enhancement of Rs. 20/ was awarded. As regards the demand for bonus the tribunal felt that it would be inexpedient to apply the formula which governed the decision of industrial claims for the payment of bonus, but made an award directing the appellant to pay puja bonus to its employees on the ground that what was described as puja bonus was being given to workmen who were similarly situated as also to the clarical staff working at the Indian Tea Association at Calcutta and that refusing the workmen 's claim for bonus against the appellant would amount to discrimination. ^ Held, that a demand for the provision of housing accommodation can be reasonably entertained where it appeared that the financial position of the employer can bear the burden involved, that under the present economic conditions prevailing in the industry the responsibility for providing housing accommodation cannot be placed solely on the shoulders of the employer, and that in due course the problem would have to be tackled by the industry in cooperation with the State, which would have to bear a part of that responsibility. The Patna Electric Supply Co., Ltd. Patna vs The Patna Electric Supply Workers ' Union, [1959] Supp. S.C. R. 761, relied on. Held, further, that before a claim for the grant of puja bonus could be sustained it must be shown (1) that it was consistently paid by the employer to his employees from year to year at the same rate, and (2) that it had been paid even in years of loss and that it had no relation to the profit made by the employer during the relevant year. A claim for puja bonus could also be made on the ground that the payment of such bonus was an implied term in the contract of employment. The Graham Trading Co. (Indian) Ltd. vs Its Workmen, ; and M/s. Ispahani Ltd., Calcatta vs Ispahani Employees ' Union, [1960] 1 S.C.R. 24, followed. Industrial profit bonus which is governed by the application of the well known formula, cannot be awarded unless a specific year for which the claim is made is indicated and it is alleged that there is available surplus in the hands of the employer for that year.

ivil Appeal No. 2941 of 1982. From the Judgment and Order dated 26.2.82 of the Punjab Haryana High Court in L.P.A. No. 1120 of 1981. P.A. Choudhary, Mrs. K. Sarada Devi and B. Kanta Rao for the Appellants. C.M. Nayyar for the Respondents. The following Order of the Court was delivered ORDER This appeal by special leave is directed against the decision of the 682 High Court of Punjab & Haryana which dismissed the writ petition of the appellant and sustained the order of his compulsory retirement In March 1949, the appellant entered into service as a clerk in the Police Department. When he was working in the office of Inspector General of Police, he appeared for selection to the posts of Excise Sub Inspector in the Excise Department of the State. He was selected and appointed as Excise Sub Inspector He continued in the post for a number of years. In October 1963, he was repatriated to his parent department But it was not a simple repatriation. The post of Excise Sub Inspector was in the higher scale than his original post in the Police Department So he was reverted and sent back to his parent department. The appellant challenged the reversion and repatriation in O.S. No. 126 of 1965 before the Court of Subordinate Judge 1st Class, Patiala. He sought for a declaration that the order of reversion was illegal and void. It was an infringement of his legal right to continue as Sub Inspector in the Excise Department. 'The learned Subordinate Judge accepted his claim and decreed the suit. He made some perti nent observation. "The plaintiff continued to hold the post beyond the prescribed period of probation and his services were not dispensed with at the end of two years and he was not reverted. The plaintiff, in fact, continued to hold the post for more than 6 years, after the maximum period of probation had expired. Consequently, the rule laid down in and on the basis there of, it is held that the plaintiff must be taken to have so continued in a substantive capacity. On this conclusion, that the plain tiff was in October, 1963, holding his post substantively, that termination of his service necessarily amounted to punishment, and must be deemed to be removal from service, which of course was not permissible without a proper enquiry. The conclusion must, therefore, be that the termination of the plaintiff 's serv ices was illegal. " It is thus clear from the above observation that the Court expressed the view that the appellant was holding a substantive post in the Excise Department. After completing his probationary period, he was holding the post of Sub Inspector in a substantive capacity. So his reversion and repatriation .amounted to penalty which was illegal since made without proper enquiry. 683 Since repatriation of the appellant was set aside by the Civil Court, the appellant was allowed to continue without interruption in the Excise Department itself. On October 1, 1975, the Excise Commissioner made an order compulsorily retiring him from service. The order was made under Rule 3(1)(a) and (b) of the Punjab Civil Services (Premature Retirement) Rules, 1975. The appellant challenged the valid ity of that order before the High Court mainly on the ground that the Excise Commissioner was not competent to make that order since he belonged to Police Department. He claimed that his lien in the Police Department was not removed and, therefore, the Inspector General of Police was alone compe tent to deal with him. In support of the contention, he placed reliance on the decision of this Court in T.C. Sharma vs Prithvi Singh & Ors., ; The High Court, however, distinguished that decision and dismissed the writ petition. It was held that the appellant had not gone to the Excise Department on deputation from the Police Department, but he held a fresh appointment as an Excise Sub Inspector. Counsel for the appellant placed strong reliance on rule 3.14 of the Punjab Civil Services Rules (Vol. I) Part I and also on the decision in T.C. Sharma case. He urged that the appellant was no doubt holding a substantive post in the Excise Department, but he had not acquired a lien against that post, since he was not confirmed in that post. It was claimed that the lien in the parent department ought to have been suspended so that it could ensure to his benefit as and when he wanted to return back to his parent department. The contention, in other words, proceeded on the premise that the lien against original post in the Police Department could not vanish even though the appellant was holding a substantive post in the Excise Department. We do not think that the contention urged for the appel lant as to Rule 3.14 could be accepted. Rule 3.14 provides that a competent authority shall suspend the lien of a Government servent when he is appointed in a substantive capacity to a permanent post outside the cadre on which he is borne. It seems to us that this rule cannot be operated to the prejudice of a Government servant who on his own has acquired legal right to an ex cadre post. Indeed, the rule is for the benefit of a Government servant who intends to return back to his parent department. That was also the view expressed in T.C. Sharma case. But then, the appellant never wanted to return back to his parent department. He was stoutly opposing repatriation and asserting his right to remain in the ex cadre post. He has thus denied himself of the benefit or ' that rule. 684 The other contention urged for the appellant that he was not confirmed in the Excise Department and unless confirmed, he acquired no lien cannot also be accepted. Lien is not a word of article It just connotes the right of a civil servant to hold the post substantively to which he is appointed. Generally when a person with a lien against a post is ap pointed substantively to another post, he acquires a lien against the latter post. Then the lien against his previous post automatically disappears. The principle being that no Government servant can have simultaneously two liens against two posts in two different cadres. It is a well accepted principle of service jurisprudence. In the instant case, the civil court has already ruled that the appellant had a right to continue in his substan tive appointment as Excise Sub Inspector. He secured that declaration when the Excise Department repatriated him to his parent department. After obtaining that decree from a court of competent jurisdiction, he could not turn round and say that he still retained lien against his post in the parent department. The lien in his parent department must be held to have been cancelled consequent on the decree of the Civil Court. Therefore, the Excise Commissioner seems to be the only competent authority to pass the order compulsorily retiring him from service. The appeal, therefore, fails and is dismissed in the circumstances of the case, we make no order as to costs. Before parting with the case, we may however add a word more. It was stated that in view of pendency of the proceed ings in this Court and in the High Court, the pension due to the appellant has not been finalised. We, therefore, direct the respondent to determine the pensionary benefits of the appellant and pay the same to his legal heirs within three months, if not already paid. G.N. Appeal dismissed.

The appellant, while working in the Police Department as a clerk, was selected, and subsequently appointed, as Excise Sub Inspector. After several years, he was reverted and sent back to his parent department. He challenged the reversion order before the Sub Judge, who allowed him to continue in the Excise Department, where he was holding a substantive post. After a decade, he was compulsorily retired by the Excise Commissioner. The appellant moved the High Court by way of a writ petition challenging the said order and con tending that the Excise Commissioner was not competent to pass the order as the appellant belonged to the Police Department where his lien continued. The High Court rejected the writ petition. This appeal by special leave is against the said deci sion of the High Court. It was contended that the lien against original post in the police Department could not vanish even though the appellant was holding a substantive post in the Excise Department. Dismissing the appeal, HELD: 1. Rule 3.14 of the Punjab Service Rules provides that a competent authority shall suspend the lien of a Government servant when he is appointed in a substantive capacity to a permanent post outside the cadre on which he is borne. This rule cannot be operated to the prejudice of a Government servant who on his own has acquired legal right to an ex cadre post. Indeed, the rule is for the benefit of a Government servant who intends to return back to his parent department. But the appellant never wanted to return back to his parent department. He was stoutly opposing repatriation and asserting his right to remain in the ex cadre post. He has thus denied himself of the benefit of that rule. [683F H] 681 T.C. Sharma vs Prithvi Singh & Ors., 16: referred to. Lien is not a word of article It just connotes the right of a civil servant to hold the post substantively to which he is appointed. Generally when a person with a lien against a post is appointed substantively to another post, he ac quires a lien against the latter post. Then the lien against his previous post automatically disappears. It is a well accepted principle of service jurisprudence that no Govern ment servant can have simultaneously two liens against two posts in two different cadres. [684A B] 3. In the instant case, the civil court has already ruled that the appellant had a right to continue in his substantive appointment as Excise Sub Inspector. He secured that declaration when the Excise Department repatriated him to his parent department. Alter obtaining that decree from a court of competent jurisdiction, he could not turn round and say that he still retained lien against his post in the parent department. The lien in his parent department must be held to have been cancelled consequent on the decree of the civil court. Therefore, the Excise Commissioner seems to be the only competent authority to pass the order compulsorily retiring him from service. [689C D] This Court directed the respondent to determine the pensionary benefits of the appellant and pay the same to his legal heirs within three months, if not already paid.]

Appeals Nos. 436 to 438 of 1961. Appeals by special leave from the judgment and order dated December 9, 1959, of the Punjab 886 High Court in Letters Patent Appeals Nos. 407, 408 and 409 of 1959. Achhru Ram and B. D. Jain, for the appellants. Gian Singh Vohra, for the respondents. October 4. The Judgement of the Court was delivered by GAJENDRAGADKAR, J. What is the effect of the retrospective operation of section 31 introduced by the Punjab Pre emption (Amendment) Act, 1960 (X of 1960) in the parent Act of Pre emption (No. 1 of 1913). That is the short question which arises for our decision in these three appeals which have been ordered to be consolidated for the purpose of hearing by this Court. These appeals arise from three pre emption suits instituted by the respondents against the respective appellants. The respondents ' case was that the properties in suit had been sold by Aftab Rai on May 31, 1956, for Rs. 10,000/ to the appellants and it is these sales which they wanted to preempt. They alleged that they are the owners of agricultural land in Patti Aulakli and Patti Rode, in Mauza Marahar Kalan, and as such, they had the statutory right to claim pre emption, under section 15(c) (ii) and (iii). The appellants resisted this claim on the ground that the respective vendees from Aftab Rai had transferred by exchanges about 2 kenals out of the lands purchased by them and as a result of the said exchanges the appellants had themselves become entitled to preempt the said sales under the same statutory provision. Since the appellants had acquired equal status with the respondents who claimed to be the preemptors, their claim for pre emption cannot be sustained. That, in brief, was the nature of the contest between the parties. 887 The trial Court held that the exchanges on which the appellants relied bad not been proved and so, it gave effect to the respondents ' right to preempt under section 15(c) (ii) & (iii). The appellants took the matter before the Addl. District Judge in appeal. The lower appellate Court was pleased to admit additional evidence under 0.41, r. 27, of the Code of Civil Procedure and held that the exchanges in question had in fact been proved and were, in law, valid. It, therefore came to the conclusion that the appellants acquired equal status with the respondents and so, the respondents ' claim for pre emption must fail. That is why the appeals preferred by the appellants were allowed and the respondents ' suits were dismissed. The dispute was then taken up before the High Court of Panjab by the respondents by second appeals. Mahajan, J., who heard these appeals held that the property acquired by exchange in lieu of the part of the property purchased by the vendees did not give the appellants a right to preempt. He referred to the fact that exchange of lands was sometimes recognised as conferring on the party the right to preempt, but that was where the land exchanged did not form part of the land sold and preempted. In the result, the High Court held that the plea made by the appellants was not well founded in law and so, the respondents were entitled to pre empt. As a result of this finding, the decrees passed by the lower appellate Court were reversed and the respondents ' suits were decreed. The appellants then moved the Division Bench by Letters Patent appeals, but these appeals were dismissed. It is against the decrees thus passed by the Division Bench in Letters Patent appeals that the appellants have come to this Court by special leave. We have already noticed that both the appellants and the respondents are claiming a right to 888 preempt under section 15(c) (ii) and (iii) of the Parent Act of 1913. On February 4, 1960, the amending Act No. 10 of J960 was passed. Section 4 of the amending Act has substituted anew s.15 of the old s.15 after making substantial changes in the provisionsof the earlier section. Clauses (ii) and (iii) of theoriginal s.15(c) have been deleted, with the result that the claims for preemption made both by the appellants and the respondents have ceased to be recognised by the amended provisions. The appellants contend that since the respondents have got a decree for pre emption in their favour on the provisions of the unamended s.15, that decree can no longer be sustained because of the provisions of s.31 of the amending Act. Section 31 provides that no Court shall pass a decree in a suit for pre emption whether instituted before or after the commencement of the Punjab Pre emption (Amendment) Act, 1959(1960) which is inconsistent with the provisions of the said Act. In support of his argument that s.31 being retrospective in operation the respondents ' title to claim pre emption can no longer be entertained. Mr. Achhru Ram for the appellants has invited our attention to a recent decision of this Court in the case of Ram Sarup vs Munshi (1) pronounced on August 30, 1962. In that case, Ayyangar, J., who spoke for the Constitution Bench considered the question about the retrospective operation of section 31 and has observed that the said provision is retrospective and that the language used in the said section is "plain the comprehensive so as to require an appellate Court to give effect to the substantive provisions of the amending Act whether the appeal before it is one against a decree granting preemption or one refusing that relief," It was no doubt urged before the Court in that case that the words used in section 31 did (1) ; 889 not justify the application of the amended provisions to proceedings pending before the appellate Court; them said words showed that the said provisions could be invoked only in cases which were pending before the trial Court. This contention was rejected and so, it must be taken to be settled that the provisions of section 31 are retrospective and can be relied upon by the appellants in their present appeals before this Court. This position would undoubtedly have helped the appellants but for another complication which has been introduced by the relevant provisions of the amended section 15 enacted by the amending Act. We have already noticed that some persons whose right to preempt was recognised by the corresponding provisions of the parent Act, have been omitted by the amended section. The amended section has also introduced another class of persons on whom the right to claim pre emption has been conferred. These persons are the tenants who hold under tenancy of the vendors the land or property sold or a part thereof. This class of tenants has been introduced in clauses (a), (b) and (c) of amended section 15. Clause four of section 15(1) (c) provides that the right of pre emption in respect of agricultural land and village immovable property shall vest in the tenants who hold under tenancy of the vendors or any one of them the land or property sold or a part thereof. Similar provisions are made in clauses (a) & (b) of the said section. For the respondents Mr. Vohra contends that they are the tenants who hold under tenancy of the vendor the lands in question and as such, they are now clothed with the right to claim pre emption. In other words, the respondents argument is that though the right to preempt which they possessed under clauses (ii) and (iii) of the unmended section 15(c) of the parent Act have been taken ,way retrospectively by the amending Act, they have been clothed with the same right by virtue of 890 the fact that they fall under the fourth clause of the amended s, 15 (1) (c) and the conferment of this right like the destruction of their right under the deleted provisions of the unamended section must operate retrospectively. He, therefore, suggests that the respondents ought to be given an opportunity to prove their case under the fourth clause of section 15(c) as amended. In this connection, he has referred us to the fact that this plea has been specifically taken by the respondents in their statement of the case before this Court. It is on this plea that the question about the effect of the retrospective operation of section 31 arises. Mr. Achhru Ram contends that though section 31 is retrospective and in that sense the rights to preempt which vested in the respondents at the time when they instituted the present suits have been retrospectively taken away from them, it cannot be said that the right to preempt to which the respondents lay claim in the present appeals has been retrospectively created. His argument is that by the amending Act, the Legislature has no doubt provided that certain classes of persons who were entitled to preempt under the old Act should not be given that right and the extinction of the said right should operate retrospectively, but that cannot be said to be the policy of the legislature in regard to the rights which have been created for the first time by the amending Act. The argument thus presented may prima facie appear to be attractive; but a close examination of the words used in section 31 shows that it is not well founded. Section 31, in substance, requires the appellate Court to pass a decree in a preemption matter which is not inconsistent with the provisions of the amending Act. In the present appeals, if we were to uphold the respondents ' right to claim preemption on the strength of the provisions of section 15(c) 891 as they stood prior to the amendment, that would be inconsistent with the provisions of the amending Act, and so, the change made by the amending Act has to be given effect to and the right which once vested in the respondents must be deemed to have been retrospectively taken away from them. On this point there is no dispute. Would it make any difference in the legal position when we are dealing with rights which are created for the first time by the amending Act on the date when this Court will pass a decree in the present appeals? If the rights created in favour of the tenants are not recognised and a decree is passed ignoring the said rights, that decree would be inconsistent with the relevant provisions of the amending Act, and section 31 has clearly enjoined that no Court shall pass a decree which is inconsistent with the provisions of the amending Act. The position, therefore, appears to be clear that when a decree is passed in a preemption matter pending before the appellate Court, that Court must refuse to recognise the right to preempt which was recognised by the unamended Act but has been dropped by the amending Act just as much as it must recognise rights which were not recognised by the unamended Act but have been created by the amending Act. The retrospective operation of s.31 necessarily involves effect being given to the substantive provisions of section 15 retrospectively and that will apply as much to the extinction of the old rights as to the creation of new ones. The retrospective operation of section 15 which is consequential on the retrospective operation of s.31 is not affected by the fact that the right of preemption prescribed by section 15 if; referred to as a right which shall vest in the persons specified in subsections (a), (b) and (c) of section 15(1). It is, however, urged that the law of preemption requires that the preemptor must possess the right to preempt at the date of the sale, at the 892 date of the suit and at the date of the decree. This position cannot be disputed. But when it is suggested that the respondents cannot claim that they had the right when they brought the present suit or when the sales were effected, the argument ignores the true effect of the retrospective operation of section 31 and section 15. If the inevitable consequence of the retrospective operation of s.31 is to make the substantive provisions of section 15 also retrospective, it follows that by fiction introduced by the retrospective operation, the rights which the respondents claim under the amended provisions of section 15 must be deemed to have vested in them at the relevant time. If the relevant provisions are made retrospective by the legislature, the retrospective operation must be given full effect to, and that meets the argument that the right to preempt did not exist in the respondents at the time when the sale transactions in question took place. Therefore, we are satisfied that the respondents are entitled to claim that they should be given an opportunity to prove their case that as tenants of the lands in suit they have a right to claim preemption. Incidentally, when the respondents filed the present suits, they had a right to preempt under the relevant provisions of the Act as they stood at that time; by the amendment, that right has been taken away, but instead they claim another right by virtue of their status as tenants of the lands, and this right is, by the retrospective operation of section 31, available to them. We must accordingly set aside the decrees passed by the High Court and send the matters back to the trial Court with a direction that it should allow the respondents an opportunity to amend their claims by putting forth their right to ask for preemption as tenants under the amended provision of 8. 15. After the amendments are thus made, the appellants should be given an opportunity 893 to file their written statements and then appropriate issues should be framed and the suits tried and disposed of in the light of the findings on those issues in accordance with law. Under the unusual circumstances in which the litigation has thus secured a further lease of life, we direct that the costs incurred so far should be borne by the parties.

The properties in suit had been sold by A to the appellants on May 31; 1956, but the respondents, as the owners of certain agricultural land in the patti claimed that they had a right of preemption under section 15 (c) (ii) and (iii) of the Punjab Preemption Act, 1913. In the suit instituted by the respondents for this purpose the appellants resisted the claim on the ground that the vendees from A had transferred by exchanges some of the items out of the lands purchased by them and that as a result of the said exchanges the appellants themselves had become entitled to preempt the said sales under the same statutory provision. The suit was, however, decreed by the trial court and the decision was confirmed by the High Court of Punjab. The appellants obtained special leave to appeal to the Supreme Court and during the pendency of 885 the appeal the Act was amended by Punjab Act 10 of 1960, by which, inter alia, (1) cls. (ii) and (iii) of section 15 (c) of the original Act were deleted, (2) cl.4 of section 15 (1)(c) provided that the right of preemption in respect of agricultural land and village immoveable property shall vest in the tenants who held under tenancy of the vendors or anyone of them the land or property sold or a part thereof, and (3) section 31 provided that no court shall pass a decree in a suit for preemption whether instituted before or after the commencement of the amending Act of 1960 which was inconsistent with the provisions of the said Act. In view of the new provisions introduced by the amending act the respondents raised a new contention that they were tenants who held under tenancy of the vendor of the lands in question and, as such, they were entitled to the right of preemption under cl.4 of s.15 (1)(c) of the Act, as amended, even if it be held that the right to claim pre emption under cls. (ii) and (iii) of s.15 (c) of the unmended Act was taken away retrospectively by the amending Act. The appellants pleaded that even assuming that cl.4 of s.15 (1)(c) was applicable, the respondents could not get a decree on the bassis of the new right of pre emption inasmuch as they had no such right on the date on which the suit was filed or when the sales were effected. Held, that (1 the provisions of s.31 of the Punjab Pre emption Act, 1913, as amended by Punjab Act 10 of 1960, are retrospective in operation and, therefore, the decree passed in favour of the respondents by the trial court and affirmed by the High Court under the unmended section could not be sustained. Ram Sarup V.Munshi [1963] 3 S.C.R. 858 followed. (2) The retrospective operation of s.31 necessarily involves effect being given to the substantive provisions of amended s.15 retrospectively, and hence the rights which the respondents now claim under the amended provisions must be deemed to have vested in them at the relevant time, with the result that they are entitled, on remand, to ask for a decree passed on the basis of the said rights,

Civil Appeal No. 1490 of 1984. From the Judgment and Order dated 16.2.1984 of the Madras High Court in O.S.A. No. 217 of 1982. section Chellaswamy, N.H. Hingorani, Mrs. Kapila Hingorani, Mrs. Rekha Pandey and D. Sadasivan for the Appellants. F.S. Nariman, M.K. Rao, P.N. Ramalingam and A.T.M. Sampath for the Respondent. 122 The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The long and grasping hand of a Multi National Company, the Monsanto Company of St. Lous, Missouri, United States of America, has reached out to prevent alleged infringement of two of their patents (Numbers 104120 and 125381) by the defendant, an Indian Private Limited Company. Though the suit, as initially laid, was with reference to two patents, the suit was ultimately confined to one patent only (Number 125381), the period for which the other patent (104120) was valid having expired during the pendency of the suit. The suit was decreed by the trial court, but was dismissed by the appellate court. The appeal which is now before us has been filed pursuant to a certificate granted by the appellate bench of the High Court on the ground that substantial questions of law of great public importance were involved. The questions, however, were not specified in the certificate. As we see it, we are unable to find any substantial questions of law of great importance. We are afraid both the lower courts misdirected themselves and missed the real substance of the dispute and found themselves chasing the mirage of legal questions which did not strictly arise. We may first refer to a few preliminary facts. Weeds, as is well known, are a menace to food crops, particularly crops like rice which belong to the grass variety. Research has been going on for years to discover a weed killer which has no toxic effect on rice, that is to say, a Herbicide which will destroy the weeds but allow rice to survive without any deleterious effect. For long the research was futile. But in 1966 67 came a break through. A Scientist Dr. John Olin discovered CP53619 with the formula '2 Chlore 2 ',6 ' Diethyl N (Butoxy Methyl) Acetanilide ' which satisfied the requirement of a weed killer which had no toxic effect on rice. The annual report of the International Rice Research Institute for 1968 state, "Weed control in rice was an important part of the Agronomy program. The first agronomic evidence of the efficacy of granular trichloroethyl styrene for the selective control of annual grasses in transplanted rice was obtained at the Institute. Another new accession, CP53619, gave excellent weed control in transplanted flooded and non flooded, upland rice. " It was further stated "CP53619 at 2 and 4 k.g./ha a.i. appeard at least twice among the 20 best treatments" and "the most outstanding new pre emergence herbicide was 2 chloro 2 ', 6 ' diethyl N (butoxymethyl) acetanilide (CP 53619). " The 123 annual report of the International Rice Research Institute for 1969 shows that the herbicide CP 53619 came to acquire the name of Butachlor. It is now necessary to refer in some detail to the averments in the plaint, as the decision of the case, in the view that we are taking, turns very much on what the plaintiffs themselves had to say about their case. The first plaintiff is the Monsanto Company and the second plaintiff is a subsidiary of the first plaintiff registered as a Company in India. It was stated in the plaint that the first plaintiff was the patentee of inventions entitled "PHYTOTOXIC COMPOSITIONS" and "GRASS SELECTIVE HERBICIDE COMPOSITIONS", duly patented under patent number 104120 dated March 1, 1966 and 125381 dated February 20, 1970. The claims and the particulars relating to the inventions were stated to be contained in the specifications of the two patents annexed to the plaint as annexure I and II. After stating so much the plaintiffs said, and this is very important, "THE ACTIVE INGREDIENT MENTIONED IN THE CLAIM IS CALLED "BUTACHLOR". It suggested, without expressly saying it that the Plaintiffs ' patents covered Butachlor also which in fact it did not, as we shall presently see. It was next stated that the first plaintiff had permitted the second plaintiff to work the patents from 1971 onwards under an agreement dated September 3, 1980. The second plaintiff had been manufacturing and marketing formulations according to the Patents Numbers 104120 and 125381 and 'a specimen tin containing formulations produced by the second plaintiff according to the said two patents and sold in the market by the second plaintiff ' was produced along with the plaint as M.O.I. It came to the notice of the plaintiffs, it was averred, that the defendant was attempting to market a formulation of Butachlor covered by the said patents. They, therefore, wrote to the defendant drawing their attention to the existence of the patents in their favour. Some correspondence ensued. In the second week of May, 1981, the second plaintiff found that the defendant was marketing formulation of Butachlor covered by the patents of the first plaintiff. Sample tins of "Butachlor 50" manufactured by the defendant were purchased by the plaintiffs and were produced along with the plaint as M.O.s 3 and 4. The legend on the tins was as follows : "Delchor 50 Composition (Butachlor 50%E.C.) Butachlor 50% W/W Herbicide Solvents and Emulsifiers 50% W/W" 124 According to the plaintiffs, the legend on the tins containing the substance manufactured by the defendants showed that what was sold by the defendants was nothing but a reproduction of the first plaintiff 's patented formulations. The formulations of the defendant were sent to Shri Ram Institute for analysis and they were said to contain the chemical "Butachlor Chemical formula for which is 2 Chloro 2 ' 6 ' Diethyl N (Butoxymethyl) Acatanilide. " On these averments, the plaintiffs alleged that the defendant had infringed their Patents Numbers 104120 and 125381 by selling formulations covered by them. The plaintiffs used for an injunction to restrain the defendant from infringing their Patents Numbers 104120 and 125371 by the manufacture or sale of the infringing formulations as contained in this marked as M.O.Nos. 2 and 3. The Plaintiffs also asked for an account etc. Annexed to the plaint were the two specifications relating to Patent Numbers 104120 and 125381. In the specification relating to "Phytotoxic Composition" (Specification No. 104120), it was claimed : "We Claim : 1. A phytotoxic composition comprising as an active ingredient a compound of the formula shown in Figure 1 of the accompanying drawings, wherein R1 and R2 are alkyl of alkoxy having from 1 to 10 carbon atoms, R3 is halogen, alkyl or alkoxy having from 1 to 10 carbon atoms, n is an integer from 0 to 3, A is oxygen or sulfur, X is chlorine, bromine or iodine, and Z,Z1 and Z2 are hydrogen, alkyl, alkoxy,alkenyl or alkynyl having from 1 to 18 carbon atoms, aryl having from 6 to 24 carbon atoms, heterocyclyl having a miximum of 24 carbon atoms and from 1 to 3 hetero atoms, or two of Z groups are combined to form a bivalent alkylene radical having from 1 to 6 carbon atoms in admixture with an adjuvant such as herein described, the active ingredient in the said composition being present in an amount of at least 0.1 per cent by weight. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbuty 1 2 chloro N (2 prophynyloxy methyl) 6 'methyl acetanilide. 125 3. A phytotexic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbutyl 2 chlore N (2 prophynyloxy methyl) 6 ' methyl acetani lide. A phytotexic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbutyl 2 chlore N(allyloxymethyl) 6 ' methylacet anilide. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 tertbutyl 2 brome N methexy methyl 6 ' methylacetanilide. 6. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbutyl 2 broome N (2 prophynylexymethyl) 6 methylacetani lide. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 chloro 2 ', 6 disthyl N (methoxymethyl) acetanilide. A phytotoxic composition as claimed in Claim 1 wherein the active ingredient is 2 ' tertbutyl 2 bromo N (allyloxymethyl) 6 ' methylacetanilide. 9. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbutyl 2 choloro N (2 methoxyethoxymethyl) 6 ' methylacetan ilide. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 ' tertbutyl 2 bromo N (2 methoxyethoxymethyl) 6 methylace tanilide. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 bromoe 2 ' terbutyl N (2,3 dihydroxypropoxyomethyl) 6 methylacetanilide. A phytotoxic composition as claimed in Claim 1, wherein the active ingredient is 2 chloro 2 ', 6 dimethyl N (isoproposymethyl) acetanilide. 13. A phytotoxic composition substantially as herein before described. " 126 In the specification relating to Grass selective Herbicide Compositions (Specification No. 125381), it was claimed: "We claim: 1. A herbicidal composition in the form of an emulsion, suspension or dispersion, comprising as active ingredient a compound selected from the group. a) 2 ',6 ' diethyl N butoxymethyl alpha chloroaceta nilide, and b) 2 ', 6 ' diethyl N (2 butoxyethyl) alpha chloro acetanilide, or a mixture of (a) and (b) in admixture with one or more diluents or carriers and surface active agents in which an emulsion is obtained by dissolving the active ingredient in an organic solvent and thereafter dispereing the solution in another liquid medium in the presence of an emulsifying agent such as herein described. A composition as claimed in claim 1, which further comprises one or more compounds selected from the following conventional pesticides, fertilizers, and extenders such as herein described. A composition as claimed in claim 2, wherein mineral extenders such as natural clays, phyro phyllites and vermiculite having a perticle size of 2000 to 149 microns, preferably of 1410 to 250 microns, are used. A herbicidal composition in the form of an emulsion, suspension or dispersion substantially as hereinbefore described. " We do not propose to set out in detail the contents of the written statement. It is sufficient to state that the Defendant claimed as he was entitled to do under section 107 of the , that the patents were liable to be revoked under section 64(1) (a),(b),(d),(e),(f),(g),(h),(i),(j),(k),(l) and (m) of the . The defendant also made counter claim seeking revocation of the patents. 127 A close scrutiny of the plaint and a reference to the evidence of the witnesses for the plaintiff atonce exposes the hollowness of the suit. We must begin with the statement in the plaint that "THE ACTIVE INGREDIENT MENTIONED IN THE CLAIM IS CALLED 'BUTACHLOR '" which suggests that Butachlor was covered by the Plaintiffs ' patents and the circumstance now admitted that no one, neither the plaintiff nor any one else, has a patent for Butachlor. The admission was expressly made by PW 2, the power of attorney holder of the first plaintiff and Director of the second plaintiff company. The learned counsel for the plaintiffs also admitted the same before us. PW 1, Dr. Dixon, Chemist of the first plaintiff company, after explaining the use of an emulsifying agent, in answer to a direct question, whether his company claimed any patent or special knowledge for the use of any particular solvent or particular emulsifying agent, in the formulation in their patent, had to admit that they had no such patent or special knowledge. He further admitted that the use of solvent and emulsifying agent on the active ingredient was one of the well known methods used in the pesticide industry to prepare a marketable product. He also expressed his inability to say what diluents or emulsifying agents the defendant used in their process. PW 2 admitted that Butachlor was a common name and that the Weed Science Society of America had allotted the common name. He stated that "Machete" was the brand name under which their company manufactured Butachlor. He also stated that there could be a number of concerns all over the world manufacturing Butachlor, but he was not aware of them. He admitted that they did not claim a patent for Butachlor. He stated that though his company did not claim a patent for Butachlor, they claimed a patent for the process of making a Butachlor emulsifiable concentrate to be used as a Herbicide composition for rice. Pursued further in cross examination, he was forced to admit that they used kerosene as a solvent for Butachlor and an emulsifier manufactured by a local Indian company as an emulsifying agent. He then proceeded to state that he claimed secrecy with regard to the manufacture of their formulation. When he asked further whether the secrecy claimed was with regard to the solvent or with regard to the stabilizer, he answered in the negative. He finally admitted that his secret was confined to the active ingredient Butachlor about which as we know there is no secret. PW 3, Robert Galson Depenning the patent agent of the first plaintiff under a power of attorney from the first plaintiff, stated that it was he that had verified the plaint and that it 128 was on his instructions that the plaint was drafted. He stated that according to him, by selling his formulations the defendant had infringed Patents Numbers 104120 and 125381, though he was unable to explain which part of his claim in Patent Number 104120 was infringed as he was not a Chemist. He stated that he said so and was able to say so in consultation with the Managing Director of the second plaintiff company. He stated that it was explained to him by PW 2 that both the Patents Numbers 104120 and 125381 were infringed. He also admitted that it was he that had signed the specification of 104120 and while he was not sure whether he had signed the specification Number 125381, he saw that it had been signed by Depenning and Depenning. We, therefore, see that Butachlor which was the common name for CP 53619 was discovered, even prior to 1968 as a Herbicide possessing the property of nontoxic effect on rice. The formula for the Herbicide was published in the report of the International Rice Research Institute for the year 1968 and its common name Butachlor was also mentioned in the report of the International Rice Research Institute for the year 1969. No one patented the invention Butachlor and it was the property of the population of the world. Before Butachlor or for that matter any Herbicide could be used for killing weeds, it had to be converted into an emulsion by dissolving it in a suitable solvent and by mixing the solution with an emulsifying agent. Emulsification is a well known process and is no one 's discovery. In the face of the now undisputable fact that there is no patent for or any secrecy attached to Butachlor, the solvent or the emulsifying agent and the further fact that the process of emulsification is no new discovery, the present suit based on the secrecy claimed in respect of the active agent Butachlor and the claim for the process of emulsification must necessarily fail. Under sec. 61(1)(d), a patent may be revoked on the ground that the subject of any claim of the complete specification is not an invention within the meaning of the Act. Under sec. 64(e), a patent may be revoked if the invention so far as claimed in any claim of the complete specification is not new, having regard to what was publicly known or publicly used in India before the date of the claim, etc. Under sec. 64(1)(f), a patent may be revoked if the invention so far as claimed in any claim of the complete specification is obvious or does not involve any inventive step having regard to what was publicly known or publicly used in India or what was published in India before the priority 129 date of the claim (the words "or elsewhere" are omitted by us as the patents in the present case were granted under the Indian Patents and , i.e., before the ). "Invention has been defined by secc. 2(j) as follows: " Invention" means any new and useful (i) art, process, method or manner of manufacture; (ii) machine, apparatus or other article; (iii) substance produced by manufacture, and includes any new and useful improvement of any of them, and an alleged invention. " It is clear from the facts narrated by us that the Herbicide CP 53619 (Butachlor) was publicly known before Patent Number 125381 was granted. Its formula and use had already been made known to the public by the report of the International Rice Research Institute for the year 1968. No one claimed any patent or any other exclusive right in Butachlor. To satisfy the requirement of being publicly known as used in clauses (e) and (f) of sec. 64(1), it is not necessary that it should be widely used to the knowledge of the consumer public. It is sufficient if it is known to the persons who are engaged in the pursuit of knowledge of the patented product or process either as men of sciene or men of commerce or consumers. The section of the public who, as men of science or men of commerce, were interested in knowing about Herbicides which would destroy weeds but not rice, must have been aware of the discovery of Butachlor. There was no secret about the active agent Butachlor as claimed by the plaintiffs since there was no patent for Butachlor, as admitted by the plaintiffs. Emulsification was the well known and common process by which any Herbicide could be used. Neither Butachlor nor the process of Emulsification was capable of being claimed by the plaintiff as their exclusive property. The solvent and the emulsifier were not secrets and they were admittedly not secrets and they were ordinary market products. From the beginning to the end, there was no secret and there was no invention by the palintiffs. The ingredients, the active ingredient, the solvent and the emulsifier, were known; the process was known, the product was known and the use was known. The plaintiffs were merely camouflaging a substance whose 130 discovery was known through out the world and trying to enfold it in their specification relating to Patent Number 125381. The patent is, therefore, liable to be revoked. We do not think that it is necessary for us to go into the various questions of law so carefully and meticulously argued by Mr. Chellaswamy. The questions were no doubt interesting and arose for the first time. But we desire to keep our interest purely academic and within bounds. So we do not pronounce upon those questions. The appeal is dismissed with costs. M.L.A. Appeal dismissed.

The plaintiff appellant instituted a suit against the respondent on the ground that its inventions entitled "Phytotoxic Compositions" and "Grass Selective Herbicide Compositions" duly patented containing the active ingredient "Butachlor" was infringed by the defendant respondent marketing "Delchor 50" a formulation of "Butachlor" which was alleged to be covered by the plaintiff 's Patent No. 125381. In the written statement, the defendant respondent claimed that the patents were liable to be revoked under s.64(1)(a), (b), (d), (e), (f), (g), (h), (i), (j), (k), (l), and (m) of the . The suit was decreed by the trial Court, but was dismissed by the appellate court. Dismissing the appeal, ^ HELD : 1(i) Under section 61(1)(d), a patent may be revoked on the ground that the subject of any claim of the complete specification is not an invention within the meaning of the Act. Under sec. 64(e), a patent may be revoked if the invention so far as claimed in any claim of the complete specification is not new, having regard to what was publicly known or publicly used in India before the date of the claim, etc. Under sec. 64(1)(f), a patent may be revoked if the invention so far as claimed in any claim of the complete specification is obvious or does not involve any inventive step having regard to what was publicly known or publicly used in India or what was published in India before the priority date of the claim. [128 G H; 129 A] 121 1(ii) To satisfy the requirement of being publicly known as used in clauses (e) and (f) of sec. 64(1), it is not necessary, that it should be widely used to the knowledge of the consumer public. It is sufficient if it is known to the persons who are engaged in the pursuit of the knowledge of the patented product or process either as men of science or men of commerce or consumers. [129 D E] 2. Butachlor which was the common name for CP 53619 was discovered, even prior to 1968 as a Herbicide possessing the property of non toxic effect on rice. The formula for the Herbicide was published in the report of the International Rice Research Institute for the year 1968 and its common name Butachlor was also mentioned in the report of the International Rice Research Institute for the year 1969. No one patented the invention Butachlor and it was the property of the population of the world. Before Butachlor or for that matter any Herbicide could be used for killing weeds, it had to be converted into an emulsion by dissolving it in a suitable solvent and by mixing the solution with an emulsifying agent. Emulsification is a well known process and is no one 's discovery. Neither Butachlor nor the process of Emulsification was capable of being claimed by the plaintiffs as their exclusive property. [128 C E] In the instant case, the solvent and the emulsifier were admittedly not secrets and they were ordinary market products. From the beginning to the end, there was no secret and there was no invention by the plaintiffs. The ingredients, the active ingredients the solvent and the emulsifier, were known; the process was known, the product was known and the use was known. The plaintiffs were merely camouflaging a substance whose discovery was known throughout the world and trying to enfold it in their specification relating to Patent Number 125381. The patent is, therefore, liable to be revoked. [129 F G; 130 A]

ition Nos. 12695, 13478 82, 13352 of 1983, 99 100, 133 34, 231, 234 36 of 1984. [Under article 32 of the Constitution of India] Civil Appeals Nos. 322 351 of 1984 Appeals by Special leave from the Judgment and Order dated the 24th June, 1983, 19th August, 1983, 1st September, 1983, & 29th December, 1983 of the Jammu and Kashmir High Court in Writ Petition Nos. 430 & 886/82, 364/81, 478/81, 132/82, 338/80, 525/80, 485/80, 67/83, 404/82, 681/82, 679/81, 688/82, 472/81, 678/82, 864 230/81, 229/83, 476/81, 228/83, 471/80, 287/83, 682/82, 344/82 621/82, 302/80, 624/80, 46/83, 912/83, 558/82 and 623/83. K. K. Venugopal and Anil Dev Singh Satish Vig, section P. Sharma, L. K. Gupta, Vimal Dave, R. C. Kaushik and Subhash Sharma for the Petitioners/Appellants. Altaf Ahmed for the Respondents. The Judgment of the Court was delivered by MADON, J. This group of Writ Petitions and Appeals by Special Leave challenges the constitutional validity of sub sections (1), (2) and (3) of section 8 of the Jammu and Kashmir General Sales Tax Act, 1962 (J & K Act XX of 1962) and seeks to quash the orders directing the Petitioners and Appellants before us (herein after for the sake of brevity referred to as "the Assessees") to pay interest on the amount of tax due according to the quarterly returns filed by them but not paid within the prescribed time. ALL the Assessees are registered as dealers under the Jammu and Kashmir General Sales Tax Act, 1962 (hereinafter referred to as "The Act"). Sub section (1) of section 7 of the Act requires every dealer liable to pay tax under the Act to furnish in the prescribed form a return of his turnover for a year within 120 days from the expiry of that year. Sub section (2) of section 7 provides as follows: "Without prejudice to the provisions of sub section (1), every dealer shall also furnish in the prescribed form quarterly returns for each quarter of the year within thirty days from the expiry of that quarter. Every such return shall be accompanied by a Treasury Receipt or any other proof of having paid the tax due on that return." Thus, the tax due according to a quarterly return is to be paid by the dealer before filing such return and proof of payment of the tax so due is to accompany such return. Sub sections (1), (2), (3), (7) and (8) of section 8, omitting what is not relevant for our purpose, provide as follows: "(1) The tax assessed, or any other amount demanded, under this Act shall be paid in such manner and within 865 such time not being less than fifteen days from the date of the notice of demand. as may be specified in the notice. In default of such payment the whole of the amount then remaining due shall become recoverable in accordance with sections 16 and 16 A. x x x x x x (2) If the tax or any other amount due under this Act is not paid by the dealer or any other person, by whom it is payable, within the period specified in demand notice, the dealer or such other person shall be liable to pay interest on the tax or other amount from the date it was payable to the date of actual payment at the following rates (a) If the default is for a period of not exceeding three months at 1% per month; (b) If the default is for a period exceeding three months but less than six months at 2% per month; (c) If the default is for a period exceeding six months at 3% per month: Provided that where, as a result of an order under Sections 11, 12, 24 or an order of the Court, the amount of tax or other sum on which interest was payable under this sub section has been reduced, the interest shall be reduced accordingly and excess interest paid, if any, shall be refunded. Explanation Interest shall be charged for full month and not for a part of the month. (3) Quarterly tax shall be paid before furnishing a quarterly return but not later than the date prescribed under sub section (2) of Section 7. X X X X X (7) Where a dealer furnishes a revised return under sub section (4) of Section 7 and the tax payable is more than the tax paid on the basis of original return, he shall pay the extra tax payable before furnishing the revised return; 866 Provided that if the tax already paid is in excess of the tax payable, such excess amount shall be treated to have been paid towards the tax payable for the quarter next following the date of furnishing such revised return. (8) Notwithstanding anything contained in this Act, if a dealer fails to pay the tax payable under this Section, the provisions of sub section (2) of this Section, Section 16 and Section 16 A shall apply mutatis mutandis to the recovery thereof. Explanation (1) Quarterly Tax means the tax payable on the basis of a quarterly return required to be furnished by sub section (2) of Section 7. Explanation (2) Interest under sub section (2) of this Section on the extra tax payable on the basis of revised return shall be payable from the date next following the date on which the tax was payable on the basis of original return. " The Assessees filed their quarterly returns within the time prescribed by the Act but without paying the tax due according to such returns. Some of them also filed revised returns thereafter. The tax due was paid by the Assessees after several months and in some cases by instalments. In a few cases, the full amount of tax was not paid even by the date the assessment order in their cases came to be made. In the case of most of the Assessees, the Assessing Authority levied penalty under sub section (2) of section 8 of the Act before making any assessment. In other cases, orders requiring interest to be paid were made along with the assessment orders. It may be mentioned that in cases where the assessment orders were made, the returns filed by the Assessees were accepted as correct. Those Assessees who are Appellants before us filed writ petitions in the Jammu and Kashmir High Court challenging the validity of section 8 of the Act under which interest was sought to be recovered from them as also the demand for payment of interest. These writ petitions were heard along with other writ petitions in which other questions arose. The High Court dismissed all these writ petitions but made no order as to the costs thereof. The petitioners before the High Court fell into four categories, namely 867 (1) Dealers who had neither filed their returns nor deposited the tax due from them and the Assessing Authority had determined the amount of tax payable by them and issued a composite notice of demand calling upon them to deposit the amount of tax along with interest due on it. (2) Dealers who had filed their returns but had not deposited the full amount of tax due according to such returns and the Assessing Authority, having accepted the returns, had issued a composite notice of demand calling upon them to pay the amount of tax along with interest due on it. (3) Dealers who had filed their returns but had paid the tax due according to such returns after the expiry of the prescribed time and in whose cases the Assessing Authority had accepted the returns and had issued a notice of demand asking them to pay interest on the amount of tax for the period for which such payment was delayed. (4) Dealers who had filed their returns and had paid the tax due according to such returns by the prescribed time but the Assessing Authority had not accepted the returns and had enhanced the amount of tax payable by these dealers and had issued a composite notice of demand calling upon them to pay the amount of tax so enhanced along with interest on it. We are concerned in these Petitions and Appeals only with dealers who fall under categories (2) and (3) above as also with those dealers who had filed their returns but had not paid the amount of tax due according to such returns by the prescribed time but had paid it later and notices were issued against them calling upon them to pay interest for the period of default before making any order of assessment, We are not concerned in these Petitions and Appeals with those dealers who fall under categories (1) and (4) above. At the hearing of these Petitions and Appeals, no arguments whatever were advanced before us in support of the contention that sub section (1) of section 8 was unconstitutional and the challenge 868 to that sub section must, therefore, fail. The only contentions which were urged at the hearing were as follows: (1) The charging of interest to the Asssssees is violative of Article 265 of the Constitution of India as there was no legislative power in the State Legislature to make a law providing for payment of interest if the amount of tax was not paid by the prescribed time and, for this reason, the provisions of section 8 of the Act in so far as they provide for payment of such interest are beyond the legislative competence of the State Legislature and, therefore, unconstitutional. (2) Sub section (2) of section 8 of the Act is void as infringing Article 14 of the Constitution because its provisions are discriminatory, arbitrary and unreasonable (3) The Assessees carried on business on credit basis and as by the dates when they filed their quarterly returns their customers had not paid to them the price of goods sold to them, the Assessees were not bound to pay tax along with their returns but were bound to pay tax in respect of those transactions of sale only when the amount of sale price was received by them from their customers. (4) In some cases, the amount of interest claimed from the Assessees exceeded the amount of tax paid by them and, therefore, the demand for such excess amount of interest was bad in law. (5) The Assessees were not liable to pay any interest on the amount of tax not paid in time without a notice of demand for payment of such amount of tax having been first issued to them. (6) Interest was levied by the Assessing Authority for the entire period of default at the maximum rate prescribed by sub section (2) of section 8 which was contrary to the provisions of that sub section. We will first examine the correctness of the contention that the impugned provisions of section 8 of the Act are violative of Article 265 of the Constitution of India. Article 265 of the Constitution 869 provides that "No tax shall be levied or collected except by authority of law. " Thus, Article 265 postulates that before any tax can be levied and collected there must be a valid law enacted by an appropriate legislature imposing such tax and providing for its collection. The submission on behalf of the Assessees was that under the Constitution the Legislature of the State of Jammu and Kashmir has no legislative power to provide for payment of interest in case of late payment of tax. It was not the contention of the Assessees, as indeed it could not be, that the Legislature of the State of Jammu and Kashmir had no legislative power to enact a law levying a tax on the sale or purchase of goods taking place within the State and making provisions for the collection of such tax, because the constitutional position in this behalf is clear and indisputable. Under clause (1) of Article 246 of the Constitution of India, Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to the Constitution referred to as the "Union List" and under clause (3) of the same Article the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II of the Seventh Schedule to the Constitution referred to as the "State List". Taxes on the sale or purchase of newspapers and on advertisements published therein fall under Entry 92 of the Union List and taxes on the sale or purchase of goods, other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce fall under Entry 92A of the Union List, while taxes on the sale or purchase of goods, other than newspapers, subject to the provisions of Entry 92A of List I, fall under Entry 54 of the State List. Thus, so far as sales tax is concerned, the Constitution bifurcates the legislative field of taxation between the Union and the States. As a result of this bifurcation, the subject of taxes on intra State sale or purchase of goods (other than newspapers) falls exclusively within the State power of taxation. The Constitution of India, however, does not apply in its entirety to the State of Jammu and Kashmir because that State holds a special position in the constitutional set up of our country. Article 370 of the Constitution of India makes special provisions with respect to the State of Jammu and Kashmir. Under sub clause (c) of clause (1) of Article 370 the provisions of Articles 1 and 370 apply in relation to the State of Jammu and Kashmir and under sub clause (d) of clause (1) of Article 370 such of the other provisions of the Constitution apply in relation to that State subject to such exceptions and modifications as the President may specify by an order issued with the concurrence of the Govern 870 ment of that State. Thus, by reason of the application of Article 1 to the State of Jammu and Kashmir by sub clause (c) of clause (1) of Article 370 the State of Jammu and Kashmir is one of the States which from the Union of India and by virtue of sub clause (d) of clause (1) of that Article so far as the provisions of the Constitution, other than those of Articles 1 and 370, are concerned, the President of India has the power, with the concurrence of the Government of the State of Jammu and Kashmir, to issue an order specifying which of them shall apply to that State and whether such provisions shall apply in their entirety or subject to such exceptions and modifications as may be specified in that order. Article 370 also envisages the convening of a Constituent Assembly for that State and the framing of a separate Constitution for it. In exercise of the power conferred by clause (1) of Article 370 the President of India, with the concurrence of the Government of the State of Jammu and Kashmir, has made the Constitution (Application to Jammu and Kashmir) Order, 1954 (C. O. 48). This order deals with the entire constitutional position of the State of Jammu and Kashmir within the framework of the Constitution of India, except only the internal Constitution of the State Government to be framed by the Constituent Assembly of that State. The Constituent Assembly of the State of Jammu and Kashmir framed its own Constitution repealing and replacing its earlier Constitution. This new Constitution, called the "Constitution of Jammu and Kashmir", was adopted and enacted by the Constituent Assembly of that State on November 17, 1965. By the Constitution (Application to Jammu and Kashmir) Order, 1954 (C. O. 48), as amended from time to time, the provisions of the Constitution of India as in force on June 20, 1964, and as amended by the Constitution Amendment Acts set out in clause (2) of that Order apply in relation to the State of Jammu and Kashmir subject to the exceptions and modifications set out in the said clause. By sub clause (6) (a) of clause (2) of the said Presidential Order, clause (1) of Article 246 of the Constitution of India is made applicable to the State of Jammu and Kashmir with certain modifications with which we are not concerned, while clause (3) of Article 246 is not made applicable to that State. Sub clause (22) of clause 2 of the said Presidential Order applies Lisi I in the Seventh Schedule to the State of Jammu and Kashmir with the omissions and modifications mentioned in the said sub clause. These omissions and modifications are, however, irrelevant for our purpose inasmuch as Entries 95 and 92A of List I apply to the State of Jammu and 871 Kashmir in an unmodified form. By the same sub clause, List II in the Seventh Schedule, namely, the State List, does not apply to the State of Jammu and Kashmir, Section 5 of the Constitution of Jammu and Kashmir, however, provides as follows: "5, Extent of executive and legislative Power of the State The executive and legislative power of the State extends to all matters except those with respect to which Parliament has power to make laws for the State under the provisions of the Constitution of India. " Thus, under the constitutional provisions applicable to the State of Jammu and Kashmir, the power of the Stage Legislature to enact a law relating to taxes on intra State sale or purchase of goods is the same as that of the Legislatures of other States in India. By sub clause (7) of clause 2 of the said Order, Article 265 is made applicable to the State of Jammu and Kashmir. Further, section 114 of the Constitution of Jammu and Kashmir is in terms identical with Article 265 of the Constitution of India and equally provides that "No tax shall be levied or collected except by authority of law. " The question which we, therefore, have to consider is "Whether in the exercise of its power to make a law with respect to taxes on the sale or purchase of goods taking place within the State, the Legislature of that State has the legislative competence to provide for payment of interest on the amount of tax due according to the return filed by an assessee but not paid within the prescribed time?" As was pointed out by Lord Dunedin in Whitney vs Commissioner of Inland Revenue(1); a passage cited with approval by the Federal Court in Chatturam and others vs Commissioner of Income Tax, Bihar,(2) and by this Court in Messrs Chatturam Horilram Ltd. vs Commissioner of Income Tax, Bihar and Orissa(2): "Now, there are three stages in the imposition of a tax: there is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable. Next, there is the assessment. 872 Liability does not depend on assessment. That, ex hypothesis, has already been fixed. But assessment particularizes the exact sum which a person liable has to pay. Lastly, come the methods of recovery, if the person faxed does not voluntarily pay. " It would follow from the above decisions that the power to make a law with respect to a tax comprehends within it the power to levy that tax and to determine the persons who are liable to pay such tax, the rates at which such tax is to be paid and the even which will attract liability in respect of such tax. This is done by the charging sections of the particular tax law. The taxing power of the State will also comprehend within it the power to provide for quantification of the liability of persons made liable to pay the tax. This is done by the provisions relating to assessment. The taxing power will also comprehend within it the power to provide for collection of tax including prescribing the methods of recovery of the amount of tax due if the person liable to pay the tax does not voluntarily pay it. The power to make a law with respect to a tax includes not only what has been set out above but also a power to make provisions in the relevant statute with respect to all matters ancillary and incidental to the levy, assessment, collection and recovery of tax. Collection of tax by the State may be either after the liability is quantified by assessment or may be prior to actual assessment by requiring the assessee to pay before any assessment is made the amount of tax admitted to be due and payable by him. This is done by making provisions such as those for advance payment of tax and for self assessment contained in the Income Tax Act, 1961. This is also what sub section (3) of section 8 of the Act does by requiring that the quarterly tax payable on the basis of a quarterly return required to be furnished by sub section (2) of section 7 shall be paid before furnishing such return. This is a mode of collection of revenue in advance before quantification of the actual tax liability and the Legislature would be well within its right and would competent to provide for recovery of such amount if it is not by the prescribed time. The Act, as its long title shows is "An to provide for the levy of a general tax on the sale or purchase goods in the State and for other matters of connected therewith" a one of the methods of collection of revenue adopted by it is to require that tax due according to the quarterly returns should be paid before filing such returns and it was within the legislative competence of the Legislature of the State of Jammu and Kashmir to provide for recovery of the amount of tax due under quarterly 873 returns if default is made in paying such amount by the prescribed time. This has been done by the State Legislature by enacting subsection (8) of section 8 under which the provisions of sub section (2) of section 8 and of sections 16 and 16 A are made applicable mutatis mutandis to the recovery of tax payable by a dealer if he fails to pay it. Sub section (2) of section 8 provides for payment of interest, section 16 provides for recovery of tax as arrears of land revenue, and section 16 A provides for issue of a garnishee notice to a person from whom money is due, or may become due, to the assessee or to a person who holds, or may subsequently hold, money for or on account of the assessee to pay to the Assessing Authority as much of the money as is sufficient to pay the amount due by the assessee by way of tax. Thus, payment of interest in case of default in payment of tax is a means of compelling an assessee to pay the tax due by the prescribed date. It is a mode of recovery of tax and well within the legislative power of the State. The challenge to sub section (2) of section 8 on the ground that the provisions of that sub section infringe Article 14 of the Constitution is a twofold one, namely: (1) that the said sub section is discriminatory, and (2) that it is arbitrary and unreasonable. Sub clause (4) of clause 2 of the Constitution (Application to Jammu and Kashmir) Order, 1954, makes Article 14 of the Constitution of India applicable to the State of Jammu and Kashmir. With respect to the charge of discrimination, it was submitted that such high rates of interest for non payment of tax are not to be found in the sales tax law of any other State and, therefore, by enacting the said sub section (2) of section 8 and providing for payment of interest at the rate of two per cent per month when the period of default exceeded three months but did not exceed six months and for interest at the rate of three per cent per month if the default was for a period exceeding six months, dealers in the State of Jammu and Kashmir were hostilely discriminated against as compared with dealers in other States. This argument wholly overlooks the very basis of the scheme of distribution of legislative power contained in our Constitution. Our Constitution is federal in its structure and a salient feature of a federal polity is distribution of legislative and administrative powers between the federated unit and the federating units, that is, between the federal government 874 and the State governments. Thus, matters in respect of which our Constitution makers felt that there should be uniformity of law throughout the country have been placed by them in the Union List (List I in the Seventh Schedule to the Constitution) conferring exclusive power upon Parliament to make laws with respect thereto, while matters which they felt were of local concern and may require laws to be made having regard to the particular needs and peculiar problems of each State have been assigned to the State Legislatures by placing them in List II of the Seventh Schedule, that is, the State List. Inter State trade and commerce is a matter which affects all the States in India and thus the whole country. It is for this reason that in the Seventh Schedule to the Constitution the subject of taxes on the sale or purchase of goods taking place in the course of inter State trade or commerce has been put in List I and made a Union subject. Taxes on the sale or purchase of goods taking place within the State affect only those who carry on the business of buying and selling goods within the State and, therefore, this subject has been put in List II of the Seventh Schedule, namely, the State List. Sales tax is the biggest source of revenue for a State and it is for the State to decide how and in what manner it will raise this revenue and to determine which particular transactions of sale or purchase of goods taking place within that State should be taxed and at what rates, and which particular transactions of sale or purchase of goods should be exempted from tax or taxed at a lower rate having regard to the subject matter of sale, as for instance, where particular goods constitute necessities for the poorer classes of people or where the goods in question are of such a nature as are required to be exempted from tax or taxed at a lower rate in order to encourage a local industry. Consideration of these matters must, from the nature of things, differ from State to State. Similarly, it is for each State to determine the methods it will adopt to collect its revenue from this source and to decide which methods would be most efficacious for this purpose. The provisions of the sales tax law of each State must: therefore, necessarily differ in various respects from the provisions of sales tax laws of other States. If the provisions of the legislation of every State on a particular topic are to be identical in every respect, there is no purpose in including that topic in the State List and it may as well be included in the Union List. Merely because the provisions of a State law differ from the provisions of other State laws on the same subject cannot make such provisions discriminatory. The second part of the challenge under Article 14 was with 875 respect to the rates at which interest is payable under sub section (2) of section 8 on the amount of tax paid after the expiry of the prescribed date of payment. It is true that the rate of two per cent per month and particularly the rate of three per cent per month can be said to be on the high side, but we fail to see how this would render the provisions of that sub section void or unconstitutional. Providing for payment of interest in case of delayed payment of tax is a method usually adopted in fiscal legislation to ensure that the amount of tax which is due is paid by the prescribed time and provisions in that behalf form part of the recovery machinery provided in a taxing statute. It is for the State to provide by what means payment of tax is to be enforced and a person who does not pay the amount of tax lawfully and admittedly due by him can hardly complain of the measures adopted by the State to compel him to pay such amount. It neither lies in the default 's mouth to protest against the rate of interest charged to him nor is it open to him to dictate to the State the methods which it should adopt for recovering the amount of tax due by him. In this connection, it is pertinent to note that under section 10 B of the Act, where as a result of an order made in appeal or revision, a refund has become due to the dealer or any other person on account of tax or penalty found to have been paid in excess, the State Government is required to pay to such dealer or person simple interest at the rate of 12 per cent per annum on the amount of such refund from the date such payment was made upto the date on which such refund was granted and in case of delay in refunding the excess amount, interest at the rate of 24 percent per annum if the refund is granted beyond a period of three months out before the expiry of six months from the date of the appellate or revisional order and at the rate of 36 per cent per annum if it is granted thereafter. Thus, under the Act, the same rates of interest apply both to the dealer who has made default in payment of tax due by him and to the State Government in case of default made by it in making payment of the amount of tax or penalty which has become refundable as a result of an appellate or revisional order. The graduated rates of interest provided by sub section (2) of section 8 cannot, therefore, be characterized as arbitrary or unreasonable. The remaining contentions are directed not against the constitutionality of the impugned statutory provisions but against the legality of the impugned orders. The first of these contentions is that the assessees, having sold goods on credit basis, are not liable to pay the quarterly tax until they have received from their custo 876 mers the price of goods sold to them. This contention is founded upon as assumption that the liability to pay the tax under the Act is contigent upon receipt of the sale price an assumption not warranted by the provisions of the Act. Under the Act, the liability to pay sales tax is cast upon a dealer. This is made clear by section 4 of the Act which is headed "Liability to tax under this Act. " The relevant provisions of sub section (1) of section 4 are as follows: "Subject to the provisions of this Act, every dealer, except the one dealing exclusively in gods declared tax free under Section 5, shall pay for each year tax on his taxable turnover at a rate not exceeding twenty five per cent of such turnover as may be determined by the Government and notified by the Government in the Government Gazette and such tax shall be charged on the sale of goods once only. X X X X X X" Under section 6, a dealer who has become liable to pay under section 4 is prohibited from carrying on business as a dealer until he has been registered in accordance with the provisions of the Act. Clause (g) of section 2 inter alia defines a 'dealer ' as meaning "any person who carries on (whether regularly or otherwise) the business of selling, purchasing or distributing goods, directly or indirectly, for cash or for deferred payment, or for commission, remuneration, or other valuable consideration". Clause (L) (1) defines the expression "sale" with all its grammatical variations and cognate expressions as meaning "any transfer of property in goods, otherwise than by mortgage, hypothecation, charge or pledge, by any person for cash or deferred payment or for any other valuable consideration. ". Clause (L) (II) defines "sale price" as meaning inter alia "the amount of valuable consideration paid or payable to a dealer for any sale made including any sum paid or payable for anything done by the dealer in respect of the goods at the time of or before delivery thereof other than the actual cost of outward freight or delivery or the cost of installation when such cost is separately charged." Under clause (n) of section 2, "turnover" includes the aggregate of the amounts of sale and purchase and parts of sale and purchase made by any dealer whether as principal, agent or in any other capacity. It is clear from the above statutory provisions that the liability to pay sales tax is that of the dealer and not of the person who purchases goods from him and for the purposes of sales tax, it is 877 immaterial whether the price of goods has been paid to the dealer or is payable to him The fact that a dealer has sold goods on credit is, therefore, wholly immaterial. This Act imposes the liability to pay sales tax on dealers. This liability is irrespective of the fact whether he has made profit of loss in his business and whether he has received the sale price or not. When the liability to pay sales tax is cast by the statute on the dealer, he may pass on to his customer the amount of tax payable by him but he can only do so as a term of the contract of sale. Unless and until the purchaser agrees to pay to his vendor the amount of sales tax payable by the vendor, he is not bound to pay it to the vendor. Where, however, the purchaser agrees to pay such amount, it forms part of the sale price on which sales tax would be payable to the State. Under the sales tax laws of some States, a dealer is permitted to recover or collect from the purchaser the amount of sales tax payable by him. Even then the dealer can recover or collect such amount only if the purchaser agrees to pay it. In such cases, under those sales tax laws the amount so recovered or collected is not treated, either in whole or in part, as part of the sale price and not taxed, provided the amount not taxed is paid over to the State or tax on the full amount, that is, including the amount of tax so recovered or collected, is required to be paid along with the quarterly or monthly return, as the case may be, and then at the time of assessment refund of the whole or part of the tax on the amount so collected is given to the dealer. In this connection, a reference was made to section 64 A of the , (substituted for the original section 64 A by the Sale of Goods (Amendment) Act, 1963, under which unless a different intention appears from the terms of the contract, in the event of any duty of customs or excise on goods or any tax on the sale or purchase of goods being imposed, increased, decreased or remitted in respect of any goods after the making of any contract for the sale or purchase of such goods, without stipulation as to the payment of such duty or tax where duty or tax was not chargeable at the time of the making of the contract, or for the sale or purchase of such goods duty paid or tax paid where duty or tax was chargeable at that time, if such imposition or increase so takes effect that the duty or tax or increased duty or tax, as the case may be, or any part of such duty or tax is paid or is payable, the seller may add so much to the contract price as will be equivalent to the amount paid or payable in respect of such duty or tax or increase of duty or tax, and is to be entitled to be paid and to sue for and recover such addition, and if 878 such decrease or remission so takes effect that the decreased duty or tax only, or no duty or tax, as the case may be, is paid or is payable, the buyer may deduct so much from the contract price as will be equivalent to the decrease of duty or tax or remitted duty or tax, and is not to be liable to pay or be sued for in respect of such deduction. We do not find Section 64 A of the to have any relevance to the point before us. That section is subject to a different intention appearing from the terms of the contract and gives a right to the seller to add the amount of customs or excise duty or sales tax or purchase tax to the price of goods where such duty or tax is imposed for the first time after the contract of sale is made, where the contract does not contain any stipulation as to payment of duty or tax, or in case the goods are sold duty paid or tax paid, where the rate of such duty or tax is increased, to add the extra duty or tax to the contract price. That section also gives a corresponding right to the buyer to deduct so much from the contract price as will be equivalent to the decrease of duty or tax or remitted duty or tax where any decrease or remittance in duty or tax takes place after the making of the contract of sale. Section 64 A thus provides for the rights and liabilities inter se of a seller and buyer of goods, where any customs or excise duty or any sales tax or purchase tax is imposed or its rate increased or decreased, or such duty or tax remitted in whole or in part after the making of the contract of sale. This section does not deal with the liability of the seller to pay sales tax to the Government. Under section 8 B of the Act, where a registered dealer realizes any amount by way of tax from the purchaser, he is required to deposit it in the Government Treasury or in the office of the Deputy Sales Tax Commissioner within one month of its realization. Where a dealer so deposits the tax, he would get credit for it against the amount of tax payable by him, but from this it does not follow that where he has not been able to recover the amount of tax or sale price from his customers, he is not bound to comply with the statutory requirements of sub section (3) of section 8 under which he has to pay tax according to the quarterly return furnished by him before the date prescribed for filing such return. The Assessees were, therefore, bound to pay the tax due according to the quarterly returns filed by them before filing such returns and the fact that their Customers had not paid to them the sale price did not exempt them from their statutory liability in this behalf. The next contention, namely, that the Assessing Authority was 879 not entitled to impose interest, the amount of which exceeded the amount of tax in respect of which default had been made in paying it by the prescribed date, is equally without any substance. No reason was advanced in support of this contention and we fail to see on what principle the Hindu Law rule of damdupat can be made applicable to a sales tax legislation. The recovery provisions of the Act are meant for speedy and prompt collection of revenue. These provisions are not meant for the benefit of defaulting tax payers and such defaulters cannot claim that the amount of interest payable by them on delayed tax payment should be scaled down as if they were entitled to claim relief under a debt relief law. In taking up such a contention, the concerned Assessees have overlooked the fact that the amount of interest payable by them would not have exceeded the amount of tax not paid by them by the prescribed date had they paid the tax due earlier as also the fact that they would not have been liable to pay any amount at all by way of interest had they paid the tax due by the prescribed date. We now turn to the contention that the Assesses were not liable to pay interest unless a notice of demand was first issued to them calling upon them to pay the amount of quarterly tax due from them. In support of this submission reliance placed upon subsections (1) and (2) of section 8 of the Act. In our opinion, reliance placed upon those sub sections is misconceived for in doing so the Assessees have overlooked the other relevant provisions of section 8. Sub section (1) of section 8 requires that the tax assessed, or any other amount demand, under the Act is to be paid in such manner and within such time, not being less than fifteen days from the date of the notice of demand, as may be specified in the notice and it is when default is made in making such payment that the whole of the amount then remaining due becomes recoverable in accordance with sections 16 and 16 A of the Act. Sub section (2) of section 8 lays down that if the tax or any other amount due under the Act is not paid within the period specified in the notice of demand, the defaulter will become liable to pay interest on the tax or other amount from the date it was payable to the date of actual payment at the rates mentioned in the said sub section. Under sub section (3) of section 8, quarterly tax is to be paid before furnishing the quarterly return but not later than the date prescribed under subsection (2) of section 7. As we have seen, under sub section (2) of section 7 quarterly returns are to be furnished within thirty days from the expiry of the quarter and such return is to be accompanied by a Treasury Receipt or any other proof of payment of tax due 880 according to that return. This requirement implies that the tax due according to a quarterly return has to be paid before the filing of that return by the prescribed date therefor. Under sub section (8) of section 8, if a dealer fails to pay the tax payable under that section, the provisions of sub section (2) of section 8 and of sections 16 and 16 A are to apply mutatis mutandis to the recovery thereof. Thus, provisions of sub section (2) of section 8 apply when quarterly tax is not paid before furnishing a quarterly return under sub section (3) of section 8 but by the express terms of sub section (8) of section 8, the provisions of sub section (2) of that section will apply to the recovery of quarterly tax not in their entirety but "mutatis mutandis". Under sub section (1) the tax assessed or any other amount demanded is to be paid within the time specified in the notice of demand. Under sub section (3), the quarterly tax is to be paid before furnishing the quarterly return but not later than the date prescribed under sub section (2) of section 7. Thus, by sub section (3) the time for payment of quarterly tax is not made dependent upon the issuance of a notice of demand and the date for payment to be specified in it but it is statutorily fixed and, as under sub section (8) of section 8 the provisions of sub section (2) are to apply mutatis mutandis to the recovery of quarterly tax, necessary changes must be made in the provisions of sub section (2) in their application to the recovery of quarterly tax payable under sub section (3). Accordingly, the requirement of sub section (2) that interest will be chargeable from the date specified for payment in the notice of demand cannot be applied to the payment of quarterly tax and necessary alterations as required by sub section (8) will, therefore, have to be made in the provisions of sub section (2) in their application to a default made in payment of quarterly tax and sub section (2) must be read as providing that interest under sub section (2) will become payable from the date prescribed by sub section (3) of section 8 for payment of quarterly tax. There is thus no substance in this contention. We may also mention that in the case of certain other orders made under the Act demanding interest on default being made in payment of quarterly tax, the challenge thereto on the ground that no interest can be charged unless a notice has been issued demanding payment of quarterly tax was negatived by this Court in Messrs Royal Booi House etc. vs State of Jammu and Kashmir and others. 881 We now turn to the last contention raised before us, namely, that the Assessing Authority was not entitled to charge interest at the maximum rate but could only charge interest at the graduated rate specified in sub section (2) of section 8. It appears that in most, if not in all, orders which have been impugned in these Petitions and Appeals, interest on the amount of quarterly tax not paid in time has been imposed at a uniform rate for the full period of default and not according to the scale of rates prescribed by sub section (2) of section 8. Thus, where the default was for a period exceeding three months but not exceeding six months, interest has been levied for the full period of default at the rate of two per cent per month and where the default was for a period exceeding six months, interest at the rate of three per cent per month has been levied for the entire period of default. In our opinion, this is not warranted by the terms of sub section, (2) of section 8 of the Act. Sub section (2) provides for different rates of interest depending upon the length of the period of default. If the default was for a period not exceeding three months, then the interest could only be charged at the rate of one per cent per month and where the default was for a period exceeding three months but not exceeding six months, then the interest which could be charged can only be one per cent month for the first three months of default and two per cent per month for the remaining period In the same way, if the default was for a period exceeding six months, interest could be charged only at the rate of one per cent per month for the first three months of default, at the rate of two per cent per month for the next three months of default and at the rate of three per cent per month for the remaining period of default. The grievance made by the Assessees is justified and their challenge to the impugned orders on this ground must, therefore, succeed. In the result, though we uphold the constitutionality of sub sections (1), (2) and (3) of section 8 of the Jammu and Kashmir General Sales Tax Act, 1962, we make the rule issued in each of the Writ Petitions before us absolute only to the extent that we restrain the State and Jammu and Kashmir from recovering from the Assessees who are Petitioners before us interest on the amount of quarterly tax paid after the expiry of the date prescribed for payment thereof by sub section (3) of section 8 of the Act at a rate other than the rate of one per cent per month for the first three months of default and at the rate of two per cent per month for the next three 882 months of default and at the rate of three per cent per month for the period of default exceeding six months. We also allow the Appeals filed by the Assessees who are Appellants before us to the same limited extent by setting aside the order of dismissal of their writ petitions passed by the Jammu and Kashmir High Court and making the rule issued in each of those writ petitions absolute only to the limited extent specified above. On an application made to us in that behalf, we grant to the Petitioners and Appellants before us three months ' time from today to make payment of the amount of interest due and payable by them according to this Judgment and the State of Jammu and Kashmir will not until the expiry of the said period of three months take any steps to recover such amount of interest from any of the Petitioners and Appellants. As the Petitioners and Appellants before us have partly succeeded in the Writ Petitions and Appeals filed by them, we make no order as to the costs of these Writ Petitions and Appeals. N.V.K Appeals & Petitions partly allowed.

The appellants and the petitioners were assessees registered as dealers under the Jammu and Kashmir General Sales Tax Act, 1962. They filed their quarterly returns within the time prescribed by the Act but without paying the tax duo according to such returns. Some of them also filed revised returns thereafter. The tax due was paid by the assessees after several months and in some cases by instalments. In a few cases, the full amount of tax was not paid even by the date the assessment orders came to be made. In the case of most of the Assessees the Assessing Authority levied penalty under sub section (2) of section 8 of the Act before making any assessment. In other cases, orders requiring interest to be paid were made along with the assessment orders. The assessees who were appellants in this Court, had filed writ Petitions in the High Court challenging the validity of section 8 of the Act under which interest was sought to be recovered as also the demand for payment of interest. The High Court dismissed the Writ Petitions. In the Appeals and Writ Petitions to this Court the assessees were: (a) dealers who had filed their returns but had not deposited the full amount of tax due according to such returns, and the Assessing 859 Authority, having accepted the returns, had issued a composite notice of demand calling up them to pay the amount of tax along with interest due on it, (b) dealers who had filed their returns but had paid the tax due according to such returns after the expiry of the prescribed time and in whose cases the Assessing Authority had accepted the returns and had issued a notice of demand asking them to pay interest on the amount of tax for the period for which such payment was delayed, and (c) dealers who had filed their returns but had not paid the amount of tax due according to such returns by the prescribed time but had paid it later and notices were issued against them calling upon them to pay interest for the period of default before making any order of assessment. It was contended on their behalf that: (1) The charging of interest from the assessees was violative of Article 265 of the Constitution as there was no legislative power in the State Legislature to make a law providing for payment of interest if the amount of tax was not paid by the prescribed time, and, for this reason, the provisions of section 8 of the Act in so far as they provide for payment of such interest are beyond the legislative competence of the State Legislature and, therefore unconstitutional. (2) Sub section (2) of section 8 of the Act was void as infringing Article 14 of the Constitution because its provisions are discriminatory, arbitrary and unreasonable. (3) The Assessees carried on business on credit basis and as by the dates when they filed their quarterly returns their customers had not paid to them the price of goods sold to them, the Assessees were not bound to pay tax along with their returns but were bound to pay tax in respect of these transactions of sales only when the amount of sale price was received by them from their customers. (4) In some cases, the amount of interest claimed from the Assessees exceeded the amount of tax paid by them and, therefore, the demand for such excess amount of interest was bad in law. (5) The Assessees were not liable to pay interest on the amount of tax not paid in time without a notice of demand for payment of tax being first issued. (6) Interest was levied by the Assessing Authority for the entire 860 period of default at the maximum rate prescribed by sub section (2) of section 8 which was contrary to the provisions of that sub section. ^ HELD : The constitutionality of sub section (1), (2) and (3) of section 8 of the Jammu and Kashmir General Sales Tax Act 1962 upheld. The State however restrained from recovering from the Assessees, interest on the amount of quarterly tax paid after the expiry of the date prescribed for payment by sub section (3) of section 8 of the Act at a rate other than the rate of one per cent per month for the first three months of default and at the rate of two per cent per month for the next three months of default and at the rate of three per cent for the period of default exceeding six months. [881 G H; 882A] 1. (i) The Constitution af India, does not apply in its entirety to the State of Jammu and Kashmir because that State holds a special position in the Constitutional set up of the country. Article 370 makes special provisions with respect to the State of Jammu and Kashmir. Under sub clause (c) of clause (1) of Article 370 the provisions of Articles 1 and 370 apply in relation to the State of Jammu and Kashmir and under sub clause (d) of clause (1) of Article 370 such of the other provisions of the Constitution apply in relation to that State subject to such exceptions and modifications as the President may specify by an order issued with the concurrence of the Government of the State. In exercise of the power conferred by clause (1) of Article 370 the President of India, with the concurrence of the Government of the State of Jammu and Kashmir, has made the Constitution (Application to Jammu and Kashmir) Order, 1954 (C. O. 48) which was amended from time to time. The provisions of the Constitution of India as in force on June 20, 1964. and as amended by the Constitution Amendment Acts set out in clause (2) of that Order apply in relation to the State of Jammu and Kashmir subject to the exceptions and modifications set out in the said clause. By sub clause (6) (a) of clause (2) of the said Presidential Order, Clause (1) of Article 246 of the Constitution of India was made applicable to the State of Jammu and Kashmir with certain modifications, while clause (3) of Article 246 was not made applicable to the State. Sub clause (22) of clause 2 of the said Presidential Order applies List I in the Seventh Schedule to the State of Jammu and Kashmir with the omissions and modifications mentioned in the said sub clause. Entries 92 and 92A of List I apply to the State of Jammu and Kashmir in an unmodified form. By the same sub clause, List II in the Seventh Schedule, namely, the State List, does not apply to the State of Jammu and Kashmir. [870G H; 871A B] (ii) Thus under section 5 of the Constitution of Jammu and Kashmir the executive and legislative power of the State extends to all matters with respect to which Parliament has power to make laws for the State under the provisions of the Constitution of India under the Constitutional provisions applicable to the State of Jammu and Kashmir, the power of the State Legislature to enact a law relating to taxes on intra State sale or purchase of goods is the same as that of the Legislatures of other States in India. By sub clause (7) of clause 2 of the said Order, Article 265 is made applicable to the State of Jammu and Kashmir. Section 114 of the Constitution of 861 Jammu and Kashmir is in terms identical with Article 265 of the Constitution of India which provides that "No tax shall be levied or collected except by authority of law." [871B D] (iii) The power to make a law with respect to tax comprehends within it the power to levy that tax and to determine the persons who are liable to pay such tax, the rates at which such tax is to be paid and the event which will attract liability in respect of such tax. This is done by the charging sections of the particular tax law. The taxing power of the state will also comprehend within it the power to provide for quantification of the liability of persons made liable to pay the tax. This is done by the provisions relating to assessment. The taxing power will also comprehend within it the power to provide for collection of tax including prescribing the methods of recovery of the amount of tax due if the person liable to pay the tax does not voluntarily pay it. The power to make a law with respect to a tax includes not only what has been set out above but also a power to make provisions in the relevant statute with respect to all matters ancillary and incidental to the levy, assessment, collection and recovery of tax. Collection of tax by the State may be either after the liability is quantified by assessment or may be prior to actual assessment by requiring the assessee to pay before any assessment is made the amount of tax admitted to be due and payable by him. [872B E] Whitney vs Commissioners of Inland Revenue, , T. C. 79, 110; Chatturam and others vs Commissioner of Income Tax, Bihar (1947) F.C.R.116, 126; , 308; Messrs Chatturam Horilram Ltd. vs Commissioner of Income Tax, Bihar and Orissa, , 297 8; , 715 6 referred to. (iv) One of the methods of collection of revenue adopted by the Act, is to require that tax due according to the quarterly returns should be paid before filing such returns and it was within the legislative competence of the Legislature of the State of Jammu and Kashmir to provide for recovery of the amount of tax due under quarterly returns if default is made in paying such amount by the prescribed time. [872H; 873A] (v) Payment of interest in case of default in payment of tax is a means of compelling an assessee to pay the tax due by the prescribed date. It is a mode of recovery of tax and well within the legislative power of the State. [873C] 2. (i) Inter State trade and commerce is a matter which affects all the States in India and thus the whole country. It is for this reason that in the Seventh Schedule to the Constitution the subject of taxes on the sale or purchase of goods taking place in the course of inter State trade or commerce has been put in List I and made a Union subject. Taxes on the sale or purchase of goods taking place within the State affect only those who carry on the business of buying and selling goods within the State and, therefore, this subject has been put in List II of Seventh Schedule, namely the State List. [874C D] 862 (ii) Sales tax is the biggest source of revenue for a State and it is for the State to decide how and in what manner it will raise this revenue and to determine which particular transactions of sale or purchase of goods taking place within that State should be taxed and at what rates. and which particular transactions of sale or purchase of goods should be exempted from tax or taxed at a lower rate having regard to the subject matter of sale, as for instance, where particular goods constitute necessities for the poorer classes of people or where the goods in question are of such a nature as are required to be exempted from tax or taxed at a lower rate in order to encourage a local industry. Consideration of these matters must, therefore, differ from State to State. Similarly it is for the each State to determine the methods it will adopt to collect its revenue from this source and to decide which methods would be most efficacious for this purpose. If the provisions of the legislation of every State on a particular topic are to be identical in every respect, there is no purpose in including that topic in the State List and it may as well be included in the Union List. Merely because the provisions of a State law differ from the provisions of other State laws on the same subject cannot make such provisions discriminatory. [874D G] (iii) Interest is payable under sub section (2) of section 8 on the amount of tax paid after the expiry of the prescribed date of payment. The rate of two per cent per month and particularly the rate of three per cent per month can be said to be on the high side, but this would not render the provisions of that sub section void or unconstitutional. Providing for payment of interest in case of delayed payment of tax is a method usually adopted in fiscal legislation to ensure that the amount of tax which is due is paid by the prescribed time and provisions in that behalf form part of the recovery machinery provided in a taxing statute. It is for the State to provide by what means payment of tax is to be enforced and a person who does not pay the amount of tax lawfully and admittedly due by him can hardly complain of the measures adopted by the State to compel him to pay such amount. [875A C] (iv) Under the Act, the same rates of interest apply both to the dealer who has made default in payment of tax due by him and to the State Government in case of default made by it in making payment of the amount of tax or penalty which has become refundable as a result of an appellate or revisional order. The graduated rate of interest provided by sub section (2) of section 8 cannot, therefore be characterised as arbitrary or unreasonable. [875F G] 3. (i) Under the Act, the liability to pay sales tax is cast upon the dealer. This is made clear by sections 4,6, and clauses (G), (L) (1), (L) (II), and (n) of section 2. It is immaterial whether the price of goods has been paid to the dealer or is payable to him. The fact that a dealer has sold goods on credit is, therefore, wholly immaterial. This liability is irrespective of the fact whether the dealer has made profit or loss in his business and whether he has received the sale price or not. [876H; 877A B] (ii) Section 64 A of the does not deal with the liability of the seller to pay sales tax to the Government. [878E] 863 In the instant case, the Assessees were bound to pay the tax due according to the quarterly returns filed by them before filing such returns and the fact that their customers had not paid to them the sale price did not exempt them from their statutory liability. [878G] 4. The recovery provisions of the Act are meant for speedy and prompt collection of revenue. These provisions are not meant for the benefit of defaulting tax payers and such defaulters cannot claim that the amount of interest payable by them on delayed tax payment should be scaled down as if they were entitled to claim relief under a debt relief law. [879 B C] 5. Under sub section 8 (1) the tax assessed or any other amount demanded is to be paid within the time specified in the notice of demand. Under sub section (3), the quarterly tax is to be paid before furnishing the quarterly return but not later than the date prescribed under sub section (2) of section 7. Accordingly the requirement of sub section (2) of section 8 that interest will be chargeable from the date specified for payment in the notice of demand cannot be applied to the payment of quarterly tax and necessary alterations as required by sub section (8) so section 8 will, therefore have to be made in the provisions of sub section (2) in their application to a default made in payment of quarterly tax and sub section (2) must be read as providing that interest under sub section (2) will become payable from the date prescribed by sub section (3) of section 8 for payment of quarterly tax. [880B F] Messrs Royal Boot House etc. vs State of Jammu and Kashmir and others. C.M.P. Nos. 32413 and 32414 of 1983 decided on January 6, 1984 by P. N. Bhagvati, Ag. C. J. and Venkataramiah and Varadarajan, JJ. referred to. Sub section (2) of section 8 of the Act provides for different rates of interest depending upon the length of the period of default. [881D] In the instant cases, interest on the amount of quarterly tax not paid in time has been imposed at a uniform rate for the full period of default and not according to the scale of rates prescribed by sub section (2) of section 8. [881 B]

minal Appeal Nos. 102404 of 1961, 90 Appeals by special leave from the judgment and order dated December 21, 1960 of the Allahabad High Court in Criminal Appeals Nos. 737,738 and 744 of 1960. Frank Anthony and P.C. Agarwala, for the appellant. G.C.Mathur and C.P. Lal, for the respondent. April 17. The Judgment of the Court was delivered by WANCHOO J. These are three appeals by special leave against the judgment of the Allahabad High Court. It will be convenient to dispose them of together, though they arise out of three different trials before the Special Judge, Saharanpur under section 5 (2) of the Prevention of Corruption Act, No. 2 of 1947, (hereinafter referred to as the Act), as the appellant is the same in all the appeals. The brief facts necessary for present purposes are these. Munnalal was the cashier of the Municipal Board of Hardwar and had been working as such since 1932. He was in charge of the cash and it was his duty to see that whenever the funds in his possession exceeded Rs. 4,000/ they were deposited in the treasury or the Imperial Bank at Roorkee. In 1949 there was an audit of the accounts of the Board and on May 24, 1949, the auditor found that the money received by the Board from April 20, 1949, to May 23, 1949, totalling Rs. 52,144/ had not been deposited in the treasury or the Imperial Bank at Roorkee. The matter was then reported to the Chairman of the Board, who called Munnalal and took his explanation as to the alleged embezzlement. It is said that the appellant admitted that he had spent some of the money in the .marriage of his daughter and some was used in his shop and Rs. 10,000/to 'Rs. 11,000/ had been given to the Executive Officer and the remainder was at his house. The appellant 91 was asked to make good the loss immediately but failed to do so. Thereupon the appellant was suspended and the matter was handed over to the police for investigation. The police registered a case under section 409 of the Indian Penal 'Code and after investigation prosecuted the Executive Officer as well as the appellant and his brother who was the Assistant Cashier at the relevant time. The case was transferred by the High Court to a magistrate in Meerut; but that case was not proceeded with as an application was made to withdraw it on the ground that the case was covered by section 5 (2) of the Act. So the magistrate discharged the three accused of that case. Thereafter necessary sanction was given for prosecution under section 5 (2) of the Act and four prosecutions were launched against the appellant and his brother. The Special Judge, however, took the view that the joint trial of the appellant and his brothers was not possible with respect to some of the moneys said to have been embezzled. He therefore ordered that there should be three separate trials of the appellant alone with respect to certain moneys in addition to the four trials of the appellant and his brother with respect to the remainder. That is how seven trials took place. In the present appeals we are not concerned with the other accused, namely, the brother of the appellant, as he was acquitted. We arc also notconcerned with four of the trials; we arc only concerned with three trials with respect to three sums of money in these three appeals. Appeal No. 102 is concerned with a sum of Rs. 1623/4/ , received between April 14, 1949 and May 23, 1949 and not accounted for; appeal No. 103 is concerned with a sum of Rs. 9611 9 6 received between April 20, 1949 and May 24, 1949 and not accounted for; and appeal No. 104 is concerned with a sum of Rs. 43087/ /3 received between April 20, 1949 and May 24, 1949 and not accounted for. 92 The case of the prosecution was that these sums were received by the appellant during the period mentioned above and had not been deposited either in the treasury or in the Imperial Bank at Roorkee as required by the rules. The appellant practically admitted the receipt of the money except a few items which were also found by the Special Judge to have been received by him. He also admitted that his duty was to deposit any sums above Rs. 4,000/ in the Imperial Bank or the treasury at Roorkee. He was however inconsistent in his defence as to what he did with the moneys which he had undoubtedly received. He first tried to prove that he had deposited the amounts. , In the alternative his case was that a practice had been prevailing for many years in the office of the Board under which the Executive Officer and other employees of the Board used to take advances from the cashier from time to time by sending slips and the cashier was utilised as a banker for all officers and servants of the Board, including the Executive Officer. Though these sums were supposed to be returned to the cashier (appellant) in the beginning of the next month when pay was drawn by those who had taken these unauthorised advances, in actual fact this did not always happen. The result of these advances which were sometimes of large amounts was that the money could not be deposited in the treasury according to the rules as these advances were being constantly made to the officers and servants of the Board. The appellant therefore contended that he had not converted the money to his own use and had advanced the same to the officers and servants of the Board according to the practice prevalent for a number of years and that such advances were even made to the highest officer of the Board, namely, the Executive Officer, and that the officers all knew of this practice and also knew that moneys were not being deposited in the Bank or the treasury at Roorkee as required by rules. 93 The Special Judge held on the evidence that it was proved that the moneys which were the subject matter of the charge (except for two items) had been received by the appellant. He also held that except for certain items, the appellant had dishonestly or fraudulently misappropriated or otherwise converted to his own use the property entrusted to him or under his control as a public servant or allowed any other person so 'to do. He therefore found the appellant guilty under section 5 (2) of the Act read with section 5 (1) (c) thereof. The Special Judge sentenced the appellant to five years ' rigorous imprisonment in the cases from which appeals Nos. 102 and 103 arise but ordered the sentences to run concurrently. He also sentenced the appellant in the case from which appeal No. 104 arises to five years ' rigorous imprisonment and a fine of Rs. 42,000/ . The sentence in this case was apparently not made concurrent. The appellant filed three appeals before the High Court which were heard together. The High Court agreed with the conclusions of the Special .Judge and upheld the conviction of the appellant in the three cases. In view however of the practice to which reference has been made above and which was proved to the hilt and in view also of the fact that these cases had taken almost 11 years to be disposed of, the High Court reduced the sentences in the three cases to two years ' rigorous imprisonment and made them all concurrent. It also set aside the sentence of fine as it was of the view that though the appellant was guilty he had not converted the money to his own use but had advanced most of it to the officers and servants of the Board. The present appeals by special leave are against these judgments of the High Court in the three appeals. ' Two points have been urged on behalf of the appellant and it is said that in view of those points the trial was illegal and should be .quashed. In the first place it is urged that the investigation was 94 irregular and not in accordance with section 5A of the Act. Section 5A lays down that no police officer below the rank of a Deputy Superintendent of Police shall investigate any offence punishable under the Act outside the presidency towns without the.order of a magistrate of the first class. What happened in this case was that originally the entire investigation was done by a sub inspector of police and therearter the case under sections 409/406 of the Indian Penal Code was instituted against the appellant, his brother and the Executive Officer. That case was later withdrawn and it was thereafter that sanction was granted for the prosecution of the appellant and his brother under section 5 (2) of the Act and investigation was made as required by section 5 A. But the evidence shows that this investigation merely consisted of this that the duly authorised investigating officer went through the papers of the earlier investigation and decided to file four prosecutions as already indicated on the basis of the earlier investigation. It does appears from these facts that though the letter of section 5A of the Act was complied with its spirit was not, for in reality there was no investigation by the officer authorised under that section and the real investigation was by a sub inspector of police who was never authorised. In H.N. Rishbud & Inder Singh vs The State of Delhi (1), this Court held that "section 5A is mandatory and not directory and an investigation conducted in violation thereof is illegal". This Court further held that "if cognizance is in fact taken on a police reporting breach of a mandatory provision relating to investigation, the results which follow cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice". It was further held that "an illegality committed in the course of an investigation does not affect the competence and the jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to ; 95 termination the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby". In view of this decision, even if there was irregularity in the investigation and section 5A was not complied with in substance, the trials cannot be held to be illegal unless it is shown that miscarriage of justice has been caused on account of the illegal investigation. Learned counsel for the appellant has been unable to show us how there was any miscarriage of justice in these cases at all due to the irregular investigation. As a matter of fact on the alternative case put forward by the appellant, the substance of the prosecution case was practically admitted by him and he merely pleaded certain mitigating circumstances. Learned counsel for the appellant however drew our attention to the State of Madhya Pradesh vs Mubarak Ali. (1) In that case an objection was taken before the trial began before the Special Judge that the investigation had been carried on in breach of section 5A of the Act. The matter went before the High Court and it directed that in order to rectify the defect and cure the illegality in the investigation, the Special Judge should have ordered the Duputy Superintendent of Police to carry on the investigation himself while the case remained pending in the court of the Special Judge. That order of the High Court was brought in appeal to this Court, and the appeal was dismissed. This case in our opinion is of no assistance to the appellant, for there the objection was taken at the earliest stage before the trial began and it was in those circumstances that the trial was stayed till proper investigation was completed and a proper report made thereafter for the prosecution of the accused of that case. In the present cases no objection was taken at the trial when it began and it was allowed to come to an end. In these circumstances the ratio of Mubarakali 's case (1) cannot apply and the decision in Rishbud 's case (2) would apply. The appellant therefore cannot say that the trial was (1) [1959] supp. 2 S.C.R. 201. (2) [L955] 1 section C.R. 1150 96 vitiated unless he can show that an. V, prejudice was caused to him on account of the illegal or irregular investigation. We have already remarked that no such thing has been shown in this case; nor was it possible 10 show any such thing in view of the alternative defence taken by the appellant. We therefore reject this contention. The next contention that has been urged is that there was no proper sanction in these cases and this is based on the fact that only four cases were filed before the Special Judge with of course proper sanction; but these cases were split up into seven and the argument is that there was no sanction for the remaining three cases, and two of the present appeals namely Nos. 102 and 103 are out of these split up cases. It is also urged that the sanction was not with respect to section 5 (1) (c) of the Act though it was under section 5 (2) of the Act and therefore it was insufficient to confer jurisdiction on the Special Judge to try the appellant under section 5(1)(c) read with section 5 (2). We are of opinion that there is no force in either of these contentions. It is true that the Special Judge split up the four cases before him into seven; but it is not disputed that the amounts involved in the three new cases which the Special Judge had directed for splitting up due to the difficulty of joint trial were with respect to amounts which were included in the four cases filed before him and with respect to which there was sanction. The mere fact that in view of the provisions of section 239 of the Code of Criminal Procedure the Special Judge thought it necessary to separate the trial of Munnalal with respect to certain items for which there was sanction would not mean that these cases which were directed by the Special Judge to be split up for that reason had no sanction behind it. The sanction of the original four cases would cover these three cases also which were split out of the original four cases. 97 As to the argument that there was no sanction for prosecution under section 5 (1) (c), it is clear that there is no force in it. The sanction says that the appellant had received money and misappropriated it by not crediting the same into the treasury and embezzled it and was therefore guilty of criminal misconduct and liable to prosecution under sections 409/406 and s 5 (2)of the Act. The allegations made clearly show that the sanctioning authority had section 5 (1) (e) in mind because the sanction speaks of misappropriation and embezzlement of the moneys of the Board and misappropriation and embezzlement is only to be found in section 5 (1) (c). It is argued however that section 5 (1) (c)speaks of misappropriation or otherwise conversion to his own use any property entrusted to him or under his control by a public servant for himself. It also speaks of a public servant allowing any other person to do so. But the sanction seems to show as if the appellant was to be prosecuted for converting the property to his own use. There is in our opinion no substance in this argument, for the sanction speaks of misappropriation and embezzlement and there is nothing in the words to imply that this was only with reference to conversion by the appellant to his own use. As the words of the sanction stand they would cover a case of misappropriation or conversion to his own use by the appellant himself or by allowing others to do so. We are therefore of opinion that the sanction was sufficient for the purpose of giving jurisdiction to ' the Special Judge to take cognizance of the cases out of which these appeals have arisen. This brings us to the merits of the three appeals. So far as this is concerned, learned counsel for the appellant has not urged and, in our opinion, rightly that the convictions are unjustified. The only question that he has urged is that in view of the established facts that the appellant was using the Board 's money in order to advance it to the officers 98 and servants of the Board beginning with the highest officer of the Board, namely, the Executive Officer and that the evidence as found by the High Court does not seem to establish that there was any conversion of the moneys by the appellant to his own use, this is a case in which the appellant was more sinned against than sinning. It is conceded that as the appellant was the cashier it was his duty in law to follow the rules with respect to the custody of the cash of the Board entrusted to him and if he did not do so he would be guilty. But it is urged that when the highest officer of the Board, namely, the Executive Officer was himself taking out money from the funds of the Board by sending slips to the cashier and other officers and servants of the Board were doing the same thing and this was well known, presumably also to the Chairman of the Board, it is not just that the appellant should be made to suffer when he was obliging the officers and servants of the Board and might even have felt compelled to grant the demands of the Executive Officer and other officers and servants of the Board, for he was serving under some of them. We must say that the evidence discloses, a scandalous state of affairs which was allowed to go on and even the highest officer of the Board, namely, the Executive Officer, was cognizant of this state of affairs and was himself a party to it. The appellant 's case further was that even the Chairman knew about it and was at times party to it and this may also be not incorrect. In these circumstances there is force in the contention on behalf of the appellant that he was more sinned against than stoning and that the misappropriation took place because he had to oblige these officers and servants of the Board or otherwise incur their displeasure which he could hardly do. So it is urged on behalf of the appellant that as he has already been in jail for more than ten months in the circumstances that punishment along with the fact that the trial had been prolonged for eleven years since 1949 should 99 be sufficient punishment for him. Ordinarily this Court does not interfere in the matter of sentence in appeals under article 136 but we think in the circumstances disclosed in the present appeals when the officers and servants of the Board including the highest officer were behaving as if the moneys of the Board were their private property and the misappropriation took place mainly because the appellant was obliging these officers and servants of the Board, that the sentence already undergone by the appellant would meet the ends of justice. We ought to add that Mr. Mathur who appeared for the respondent State did not feel justified and we think rightly in pressing for the confirmation of the reduced sentence passed by the High Court in appeal. We therefore dismiss the appeals with the modification that the sentence m each case is reduced to the period already undergone. The appellant, if on bail, shall be discharged from his bail bonds in respect of these appeals. Appeals dismissed. Sentence reduced.

The appellant was the cashier of the Municipal Board Hardwar. He was in charge of the cash and it was his duty to see that funds above Rs. 4,000/ were deposited 'in the treasury or the Imperial Bank. On audit it was found that money received by the Board totalling Rs. 52,144/ was not deposited as required by the rules. On complaint by the Chairman of the Board, a Sub Inspector of Police investigated the case and a case was registered under section 409 of the Indian Penal Code, But this case was withdrawn and the accused discharged on the ground that it was covered .by section 5 (2) of the Prevention of Corruption Act. Thereafter investigation was conducted by an officer as required by section 5A of the Act. But this investigation consisted of this that the duly authorised investigating officer went through the papers of the earlier investigation and decided to file a fresh prosecution on the basis of the earlier investigation. Sanction was obtained for (2) of the Act. Subsequently the four cases, in which the appellant and his brother were jointly charged were split up into 7 cases. In the three new cases only the appellant was tried. The Trial Judge found the appellant guilty unders 5 (2) read with section 5 (1) of the Act and sentenced him to undergo imprisonment and to pay fine. On appeal to the High Court, it upheld the conviction but reduced the sentence and. set aside the sentence of fine. The appellant appealed to this Court with special leave. The following points were urged in the appeal before this Court. Firstly, it was urged that the investigation 89 irregular and not in accordance. ,with section 5A of the Act in as much as the investigation was not conducted by a person authorised by that section. Secondly, it was contended that sanction was obtained only for the first four cases and no sanction was obtained for the three new cases (after splitting up the four) out of which the present appeals have arisen. It was further contended that the sanction was not with respect to section 5 (1) (C) or ' the Act though it was under section 5 (2)of the Act and therefore it was insufficient to confer ,jurisdiction on.the Special Judge to try the appellant under section 5 (1) (c) read with section 5 (2) of the Act. Held that section 5A is mandatory and not directory and an investigation conducted in violation thereof is illegal. But this illegality wilt not vitiate the results of the trial unless it is shown that it has brought about a miscarriage of justice; neither does it affect the competence or jurisdiction of the court to try the case. In the present appeals it is not shown that there has been miscarriage of justice as a result of the illegal investigation. H.N. Rishbud & Inder Singh vs State of Delhi, [1955] I S.C.R. 1150 followed State of Madhya Pradesh vs Mubarak All [1959] Supp. 2 S.C.R. 201 distinguished. The mere fact that in view of the provisions of section 239 of the Code of Criminal Procedure, 1898, the Special Judge thought it necessary to separate the trial of the appellant with respect to certain items for which there was sanction would not mean that these cases had no sanction behind it. The sanction of the original four cases would cover these three cases also. The allegations made in the sanction show that the sanctioning authority had section 5 (1) (c) in mind because the sanction speaks of misappropriation and embezzlement of the 'money of the ' Board and misappropriation and embezzlement is only to be found in section 5 (1) (c). As the words of the sanction stand they would cover a case of misappropriation or conversion to Ins own case by the appellant himself or by allowing others to do so. The sanction is sufficient for the purpose of giving jurisdiction to the Special Judge to take cognizance of the cases out of which the present appeals have arisen.

Civil Appeal No. 1601 of 1971. Appeal by Special Leave from the Judgment and Order dated the 30th March, 1971 of the Madras High Court in C.R.P. No. 19883 of 1968. T.S. Krishnamurthy Iyer, Gopal Subramanium and Mrs. Saroja Gopalakrishnan for the Appellant. P. Govindan Nair, Miss Seita Vaidyalingam and Mrs. Baby Krishnan for the Respondent. The Judgment of the Court was delivered by PATHAK, J. This appeal by special leave is directed against an order dated March 30,1971 of the Madras High Court dismissing a revision petition arising out of proceedings under the Madras City Tenants Protection Act, 1921. Almost fifty years ago, on September 19, 1934, the respondent and his mother granted a lease in favour of one Abhirama Chettiar in respect of 50 cents of open land in Coimbatore for a period of twenty years on an annual rent of Rs. 1080 for the construction of a building suitable for use as a theatre. Abhirama Chettiar constructed a theatre on the site. Subsequently, on July 14, 1937 Abhirama 332 Chettiar assigned his rights to the appellant. The appellant attorned to the respondent and was accepted as a tenant. In March, 1964, the respondent served notice upon the appellant calling upon it to vacate the property and surrender vacant possession of the site. The appellant refused to do so, and set up an oral agreement entitling it to an extension of the lease for a further period of twenty years. The respondent filed a suit against the appellant for its ejectment. Shortly thereafter, the appellant filed a suit against the respondent for specific performance of an agreement to extend the lease. On January 16, 1957 the learned Subordinate Judge, Coimbatore, decreed the respondent 's suit for possession with mesne profits and dismissed the appellant 's suit. The appellant appealed to the High Court against the two decrees. During the pendency of the appeals the Madras City Tenants ' Protection Act, 1921 was extended to the town of Coimbatore with effect from February 19, 1958. The appellant filed Civil Miscellaneous Petition No. 1835 of 1958 in the appeal arising out of the suit for ejectment and prayed for directions under section 9 of the Act for the sale of the site to it. The application was resisted by the respondent on the ground that section 9 was void. On July 28, 1958 Panchapkesa Iyer J. passed the following order: "I declare that the petitioner is entitled to purchase the site concerned in the petition under Section 9 of the Act, but on paying the full market value current today as freely undertaken by himself. The lower Court will appoint a suitable experienced commissioner to fix the value of the site based on the market value prevalent this day (28th July 1958). The Commissioner 's fees will be paid by the commissioner who will bear it himself. In this petition all the parties will bear their own costs. As soon as this order becomes final the petitioner will withdraw A.S. No. 100 of 1957 and 255 of 1957 on the file of this Court, as infructuous as undertaken by him, and they will then be dismissed without costs. " The petition was remitted by the learned Judge to the Subordinate Court, Coimbatore for appointing a Commissioner to fix the market value of the site. Against that order the respondent preferred a Letters Patent Appeal, which was dismissed. The respondent then appealed to the Supreme Court. By its judgment dated March 4, 1964, reported as N. Vajrapani Naidu and Another vs The New Theatre 333 Carnatic Talkies Ltd., Coimbatore the Supreme Court upheld the judgment of Panchapakesa Iyer J. and dismissed the appeal. Now during the pendency of the appeal in the Supreme Court, section 9 of the Madras City Tenant 's Protection published in the Fort St. George Gazette dated July 27, 1960 Act was amended by Madras Act No. XIII of 1960. Upon that, the respondent filed two petitions in the High Court, C.M.P. No. 7241 of 1960 praying for the review and modification of the order dated July 28, 1958 in the light of the amended section 9, and C.M.P. No. 7242 of 1960 praying for stay of the enquiry directed by that order. On April 1, 1964, upon the dismissal of the respondent 's appeal in this Court, the High Court dismissed the appeals against the decrees passed by Panchapakesa Iyer J. as withdrawn. The High Court also transferred the C.M.P. Nos. 7241 and 7242 of 1960 to the trial court for consideration, and directed the trial court to fix the market value and pass final orders in C.M.P. No. 1835 of 1958. The learned Subordinate Judge held that the respondent was entitled to the benefit of the amended section 9 of the Act, and directed the Commissioner to determine the minimum extent of land necessary for convenient enjoyment by the appellant to take steps for fixing the price thereof on the basis of the average market value of the three years immediately preceding the date of its order. C.M.P. No. 7242 of 1960 was dismissed as superfluous. Against the order of the trial court the appellant filed an appeal in the court of the learned First Additional Judge, Coimbatore. The appeal was dismissed. Thereafter, the appellant filed Civil Revision Petition No. 1883 of 1968 in the High Court, and on March 30, 1971 the High Court dismissed the Revision Petition. The High Court affirmed that the case was governed by the amended section 9 of the Act, and rejected the contention of the appellant that C.M.P. No. 7241 of 1960 was not competent in the High Court as the order dated July 28, 1958 by Panchapakesa Iyer J. had been confirmed by the Supreme Court, in appeal. Two contentions have been raised by the appellant in this appeal. The first is that the amended section 9 of the Madras City Tenants ' Protection Act cannot be invoked in the present case, and that section 9, as it stood before the amendment, is the provision which governs the rights of the parties. The other contention is that, in any event, the amended section 9 should have been invoked in the appeal 334 pending in this Court and the relief not having been sought there it was not open to the respondent to seek relief after the appeal has been disposed by this Court and the order of Panchapakesa Iyer J. had acquired finality. Before its amendment by Madras Act XIII of 1960, section 9 provided as follows: "9. (1) Any tenant who is entitled to compensation under section 3 and against whom a suit in ejectment has been instituted or proceeding under section 41 of the , taken by the landlord, may within one month of the date of the Madras City Tenants Protection (Amendment) Act, 1955, coming into force or of the date with effect from which this Act is extended to the municipal town or village in which the land is situated or within one month after the service on him of summons, apply to the court for an order that the landlord shall be directed to sell the land for a price to be fixed by the court. The court shall fix the price according to the lowest market value prevalent within seven years preceding the date of the order and shall order that, within a period to be determined by the court, not being less than three months and not more than three years from the date of the order, the tenant shall pay into court or otherwise as directed the price so fixed in one or more instalments with or without interest. (2) XX XX XX (3) On payment of the price the court shall pass a final order directing the conveyance of the land by the landlord to the tenant. On such order being made the suit or proceeding shall stand dismissed, and any decree or order in ejectment that may have been passed therein but which has not been executed shall be vacated. " Upon its amendment, section 9 now reads: "9 (1) (a) Any tenant who is entitled to compensation under section 3 and against whom a suit in ejectment has been instituted or proceeding under section 41 of the , taken by the landlord, may within one month of the date of Madras 335 City Tenants, Protection (Amendment) Act, 1955 coming into force or of the date with effect from which this Act is extended to the municipal town or village in which the land is situated or within one month after the service on him of summons apply to the court for an order that the landlord shall be directed to sell for a price to be fixed by the court, the whole or part of, the extent of land specified in the application. (b) on such application, the court shall first decide the minimum extent of the land which may be necessary for the convenient enjoyment by the tenant. The court, shall then fix the price of the minimum extent of the land decided as aforesaid, or of the extent of the land specified in the application under clause (a) whichever is less. The price aforesaid shall be the average market value of the three years immediately preceding the date of the order. The court shall order that within a period to be determined by the court not being less than three months and not more than three years from the date of the order, the tenant shall pay into court or otherwise as directed the price so fixed in one or more instalments with or without interest. (2) XX XX XX XX (3) (a) on payment of the price fixed under clause (b) of sub section (1) the court shall pass an order directing the conveyance by the landlord to the tenant of the extent of land for which the said price was fixed. The court shall by the same order direct the tenant to put the landlord into possession of the remaining extent of the land, if any. The stamp duty and registration fee in respect of such conveyance shall be borne by the tenant. (b) On the order referred to in clause (a) being made, the suit or proceeding shall stand dismissed, and any decree or order in ejectment that may have been passed therein but which has not been executed shall be vacated. " The question whether the case is governed by the unamended section 9 or the amended section 9 turns on the consideration whether the amendment of section 9 was intended to operate retrospectively or must 336 be construed as prospective only. Let us begin from the beginning. When the Madras City Tenants ' Protection Act was extended to the town of Coimbatore in 1958, the respondent 's suit for ejectment had already been filed and in fact was pending in appeal. It was never disputed between the parties that section 9 would operate retrospectively and affect the rights of the parties in the pending appeal. It was on that basis that the appellant applied to the court for the benefit of the provisions of section 9. The Act itself clearly laid down that section 9 could be invoked in a pending suit or proceeding, for section 10 declared that section 9, among other provisions, would "apply to suits in ejectment . . . which are pending . . in the city of Madras before the commencement of the Madras City Tenants ' Protection (Amendment) Act, 1958, and in any municipal town or village before the date with effect from which this Act is extended to such town or village. " It is to enable a tenant to secure the benefit of section 9 in a pending suit or proceeding that section 9 (1) provides that such tenants may apply under that provision "within one month of the date of the Madras City Tenants ' Protection (Amendment) Act, 1955 coming into force or of the date with effect from which this Act is extended to the municipal town or village in which the land is situated . ." This provision was necessary to enable section 9 to govern pending suits and proceedings. The other provision in section 9 (1) providing that the period of one month would commence from "the service on him of summons" applied to future suits and proceedings. When the Madras Act XIII of 1960 amended the principal Act, it amended not only section 9 thereof but section 10 also. Section 10 was amended in order that the amended provisions should apply to pending ejectment suits and proceedings. The Legislature employed the same device in respect of pending suits and proceedings as it had when respect of pending suits and proceedings as it had when the Act was originally applied to such suits and proceedings, the only difference being that while the original section 10 referred to the then existing provisions of the Act, the amended section 10 referred to the amended provisions, including the amended section 9, of the Act. It is apparent from the provisions of the amended section 9 (1) extracted earlier that the scheme respecting the tenant 's right to purchase and the landlord 's obligation to sell, the land now stood modified. Whereas the original section 9 (1) provided for the making of an application by the tenant within a specified period to the court for an order directing the landlord to sell the land for a price to be fixed 337 by the court, and the court was required to fix the price according to the lowest market value prevalent within seven years preceding the date of the order, and to order, within a period to be determined by the court, the tenant to pay into court or otherwise as directed the price so fixed, the amended section 9 (1) is divided into two clauses. Clause (a) entitles the tenant, within an identical period, to apply to the court for an order requiring the landlord to sell, for a price to be fixed by the court, the whole, or part of, the extent of the land specified in the application. The court can now direct the sale of a part only of the land mentioned in the application and is not compelled to pass an order in respect of the entire land. Clause (b) provides that the court will first decide the minimum extent of the land necessary for convenient enjoyment by the tenant, and thereafter the court will fix the price of such minimum extent of land or of the extent of the land specified in the application, whichever is less. Furthermore, the price is to be the average market value of the three years immediately preceding the date of the order. We are clear in our mind that if the suit was pending on the date when the amendments in the principal Act were brought into force, the amended provisions of the Act will govern the disposal of the suit. Now, the appellant had already filed C.M.P. No. 1835 of 1958 praying for directions under section 9 for the sale of the site. On that application Panchapakesa Iyer J. had passed an order dated July 28, 1958 holding the appellant entitled to purchase the site on paying the full market value current on that date, and had directed the trial court to appoint a Commissioner to fix the value of the site. The order did not dispose of the application and the suit, for under the original section (3) the statute contemplated an order by the court, after it was satisfied that the tenant had paid the price determined by it, directing the conveyance of the land by the landlord to the tenant. It was only after such order was made that the application and the suit would stand concluded. In Gnanaprakasam and Another vs Mahboob Bi and others, a learned Single Judge of the Madras High Court held that even where the original court had made an order fixing the price of the land and directing its payment by the tenant, the application filed by the tenant could not be regarded as at an end so long as final orders directing execution of conveyance and delivery of possession were not passed. The stage for passing such order had not been reached yet when the principal Act was amended by 338 Act XIII of 1960. The suit continued pending on the date when the amendments took effect. And consequently, it was now governed by the provisions of the amended s.9. We may reiterate that the order dated July 28,1958 did not complete the proceeding in the suit. It constituted one stage only in the suit, and inasmuch as the suit was now to be disposed of in accordance with the amended statute the incomplete proceeding had to give way to the operation of the amended statute. As the scheme under the original section stood superseded by the scheme enacted under the amended sections the order of July 28,1958 stood aborted and pursuant to the amended section fresh proceedings had to be taken by the court in order to dispose of the suit. The respondent, therefore, filed C.M.P. No. 7241 of 1960 praying for a review of the order dated July 28,1958 in the light of the amended s.9. In other words, the court was now called upon to dispose of the application of the appellant, not in the light of the provisions of the original s.9 but on the basis of the provisions of the amended s.9. We are of opinion that the trial court is right in taking the view, and the High Court in affirming it, that C.M.P. No. 1883 of 1968 and the suit had to be disposed of on the basis of the provisions of the amended s.9. The contention to the contrary raised by the appellant must fail. We are also unable to accept the other contention of the appellant that the respondent should have invoked the benefit of the amended section 9 in the appeal pending in this Court, and that not having done so it was not open to the respondent to apply for relief in the court below after the appeal had been disposed of by this Court. It is apparent that the scope of the appeal filed in this Court was restricted to the validity of s.9 and section 12 of the unamended Madras City Tenants ' Protection Act. It must be remembered that the order of Panchapakesa Iyer J, when gave rise to that appeal, was made before the Act was amended in 1960, and this Court concerned itself solely with the validity of the unamended statutory provisions. In fact, perusal of its judgment will show that this Court declined to consider the operation of the amendments brought about in 1960. In the circumstances, it is not possible to urge that the respondent might, or ought to, have insisted on relief under the amended s.9 in the appeal pending in this Court. It was, 339 therefore, open to the respondent after the disposal of the appeal by this Court to apply to the court below for an order in terms of the amended s.9. In the result, the appeal is dismissed with costs. N.V.U. Appeal dismissed.

The respondent and his mother granted a lease in respect of an open site of land for a period of 20 years in favour of a person, who constructed a theatre thereon and who later assigned his rights to the appellant and the appellant was accepted as a tenant by the respondent. The respondent subsequently served notice upon the appellant calling upon it to vacate the property and to surrender vacant possession of the site. The appellant refused, and set up can oral agreement entitling it to an extension of the lease for a further period of 20 years. The respondent filed a suit for ejectment against the appellant and the appellant filed a suit for specific performance of an agreement to extend the lease. The subordinate Court decreed the respondent 's suit for possession with mesne profits and dismissed the appellant 's suit. The appellant appealed to the High Court against the two decrees, and during their pendency the Madras City Tenants ' Protection Act, 1921 was extended to the town where the suit property was situated. The appellant thereupon filed a Civil Miscellaneous Petition in the appeal arising out of the suit for ejectment, for directions under section 9 of the Act for sale of the site. This application was resisted by the respondent on the ground that section 9 was void. The High Court upheld the validity of the section, declared the appellant entitled to purchase the site under section 9 and remitted the matter to the subordinate Court for appointment of a Commissioner to fix the market value of the site. Against that order the respondent preferred a Letters Patent Appeal which was dismissed and this order was confirmed by the Supreme Court. During the pendency of the appeal in this Court, section 9 of the Madras City Tenants ' Protection Act was amended by Madras Act No. XIII of 1960. The respondent filed two Civil Miscellaneous Petitions in the High Court praying for review and modification of the earlier order in view of the amended section 9, and for stay of the valuation proceedings. 330 After the dismissal of the respondent 's appeal in the Supreme Court, the High Court dismissed the pending appeals as withdrawn transferred the two Civil Miscellaneous Petitions to the trial court and directed it to fix the market value of the site and pass final orders. The subordinate Court held that the respondent was entitled to the benefit of the amended section 9, and directed the Commissioner to determine the minimum extent of land necessary for convenient enjoyment and fix the price on the basis of the average market value of the land during the three years immediately preceding the date of its order. The appeal to the District Court and the Civil Revision Petition in the High Court against this order were dismissed. In the appeal to this Court it was contended on behalf of the appellant that the amended section 9 of the Madras City Tenants ' Protection Act, could not be invoked, and that section 9, as it stood before the amendment, governed the rights of the parties, and that in any event the amended section 9 should have been invoked in the appeal pending in the Supreme Court, and that relief not having been sought there, it was not open to the respondent to seek relief after the appeal had been disposed of by the Supreme Court. Dismissing the appeal, the Court. HELD: 1 (i) If the suit was pending on the date when the amendments in the principal Act (Madras City Tenants ' Protection Act, 1921) were brought into force, the amended provisions of the Act will govern the disposal of the suit. [337 D] (ii) The suit continued pending on the date when the principal Act was amended by Act XIII of 1960. Consequently, it was governed by the provisions of the amended section 9. As the scheme under the original section stood superseded by the scheme enacted under the amended section, the order of July 28, 1958 stood aborted and pursuant to the amended section fresh proceedings had to be taken by the Court to dispose of the suit. [338 A B] (iii)When the Amendment Act XIII of 1960 amended the principal Act, it amended not only section 9 thereof but section 10 also. Section 10 was amended in order that the amended provisions should apply to pending ejectment suits and proceedings. The provisions of the amended section 9 (1) reveal that the scheme respecting the tenant 's right to purchase, and the landlord 's obligation to sell, the land stood modified. Whereas the original section 9 (1) provided for the making of an application by the tenant within a specified period to the court for an order directing the landlord to sell the land for a price to be fixed by the court, and court was required to fix the price according to the lowest market value prevalent within seven years preceding the date of the order, and to order, within a period to be determined by the court, the tenant to pay into court or otherwise as directed the price so fixed, the amended section 9 (1) is divided into two clauses. Clause (a) entitles the tenant within an identical period, to apply to the court for an order requiring the landlord to sell, for a price to be fixed by the court, the whole, or part of, the extent of the land specified in the application. Clause (b) provides that the court will first decide the minimum extent of the land necessary for convenient enjoyment by the tenant, and thereafter the 331 court will fix the price of such minimum extent of land or of the extent of the land specified in the application, whichever is less. [336 F H; 336 H 337 C] In the instant case, the appellant had already filed Civil Miscellaneous Petition No. 1835 of 1958 praying for directions under section 9 for the sale of the site. On that application the High Court passed an order dated July 28,1958 holding the appellant entitled to purchase the site on paying the full market value current on that date and had directed the trial court to appoint a Commissioner to fix the value of the site. That order did not dispose of the application and the suit, for under the original section 9(3) the statute contemplated an order by the Court, after it was satisfied that the tenant had paid the price determined by it, directing the conveyance of the land by the landlord to the tenant. It was only after such an order was made that the application and the suit would stand concluded. [337 E G] 2. The scope of the earlier appeal filed in the Supreme Court was restricted to the validity of section 9 and 12 of the unamended Madras City Tenants ' Protection Act, and the Court declined to consider the operation of the amendments brought about in 1960. It was, therefore, open to respondent after the disposal of the appeal to apply to the court below for an order in terms of the amended section 9. [338 F H; 339 A]

Appeal No. 2462 of 1968. Appeal by Special Leave from the Judgment and Order dated 17 5 1968 of the Allahabad High Court in First Appeal No. 13 of 1956. M. N. Phadke, M. Qamaruddin, (Mrs.) M. Qamaruddin, M. Y. Omar, N. Aly Khan and V. M. Phadke for the appellant. 889 Lal Narain Sinha, D. P. Singh, section C. Agarwal, A. Gupta, section Mohdkazum and P. P. Singh; for the Respondent. The Judgment of the Court was delivered by UNTWALIA, J. This is an appeal by special leave. Bibi Saddiqa Fatima, the appellant, was the plaintiff in Suit No. 86 of 1952 filed in the Court of the Civil Judge it Aligarh in which the defendant was Saiyed Mohammad Hasan. He was the sole respondent in this appeal also. He died during the pendency of the appeal and on his death his legal heirs and representatives were substituted as respondents. For the sake of convenience hereinafter in this judgment by the respondent would be meant the original respondent. One Smt. Sughra Begum was a Shia Muslim Lady. She was a resident of Asgharabad in the District of Aligarh. She was possessed of vast Zamindari and other properties. On October 6, 1928, she created a waqf of the entire properties dividing them in three qurras. Raja Haji Saiyad Mohammad Mahmood Hasan was appointed by the waqifa as the Mutawalli of qurra No. 1. His brother was appointed the Mutawalli of the second qurra. The waqifa appointed herself the Mutawalli of the third qurra. The dispute in this case relates to a property concerning qurra No. 1. The Raja 's first wife was Smt. Akbari Begum. She died in the year 1931 leaving behind four sons and six daughters. Raja Sahib, when he was about 50 years of age, took the plaintiff as his second wife in the year 1933. The plaintiff, at the time of her marriage with the Raja, was a young lady of seventeen. Raja died in September, 1939. On January 22, 1935, a permanent lease was executed on behalf of one Saiyed Anwarul Rahman in respect of the disputed land in the name of the plaintiff. The rent fixed was Rs. 80/ per year. Between the years 1937 and 1939 a Kothi (Bungalow) was constructed on the said land, which was named as 'Mahmood Manzil '. The suit property in this litigation is the said Kothi together with the land appertaining to it. In short the plaintiff 's case is that the disputed property belongs to her. The defendant was inducted as a tenant of the Kothi an and from 1st of March, 1947 on a rental of Rs. 60/ per month. He paid rent upto May, 1950 but did not pay any rent thereafter. In the year 1952, the plaintiff served a notice on the defendant to pay the arrears of rent and deliver vacant possession of the Kothi. The defendant, in his reply, refuted the claim of the plaintiff and asserted that the Kothi did not belong to her nor was be a tenant of the same. Hence the appellant instituted the suit for realisation of arrears of rent, damages and recovery of possession of the suit property. The respondent, inter alia, pleaded that Raja Sahib, the. first Mutawalli of qurra No. 1, had acquired the lease of the land and constructed the Kothi with the waqf fund as Mutawalli of the waqf. It was a waqf property. After the death of the Raja, the respondent became the Mutawalli of qurra No. 1 including the Kothi in question. He occupied the Kothi as a Mutawalli and not as a tenant. The Trial Court accepted the case of the defendant, rejected that of the plaintiff and 6 329SCI/78 890 dismissed her suit. The ' Allahabad High Court has dismissed her appeal. She has preferred this appeal in this Court on grant of special leave. Shri M. N. Phadke advanced a very strenuous argument in sup port of this appeal. Shri Lal Narayan Sinha combated his argument on behalf of the respondent. It would be convenient to refer to some more facts and facets of the case from the pleadings of the parties and judgments of the Courts below before enunciating and enumerating the submissions made on their behalf. The case pleaded in the plaint by the appellant was like this, Raja Sahib out of great love for the plaintiff "used to pay her a handsome amount every month as pin money and also a good deal of money occasionally. " The plaintiff, with the object of constructing a Kothi, took on lease the disputed land measuring about 4 bighas and had been paying the annual rent of Rs. 80/ since the execution of the lease. She pleads in para 4: "After the execution of the said lease, the plaintiff with her personal fund built a kothi and the out houses on the land mentioned in paragraph No. 3 above and named it as Mahmood Manzil after the name of her husband. The construction of this Kothi bad been completed by May 1938, after which the plaintiff herself used lo stay in that Kothi whenever she came from Asgharabad to Aligarh." The plaintiff bad only one daughter born to her out of the wedlock with the Raja. She is Smt. Abrar Fatima. She was married on the 25th May, 1950 to one Saiyed Mohammed Raza Ali Khan. The defendant was quite obedient and faithful to the plaintiff until the marriage of her daughter. But after the said marriage, he gradually turned hostile and thereupon the plaintiff mostly lived with her daughter. According to the respondent 's case in his written statement the lease was taken by Raja Sahib and the sum of Rs. 786/spent on 'Nazrana ' etc. for taking the lease was paid by him from the income of the waqf property and he constructed the Kothi from the wakf fund of Asgharabad estate. He had neither any money of his own to invest in acquisition of the property nor was the property acquired by the plaintiff with her personal fund. The appellant was examined on commission as a witness to support her case at the trial. In her examination in chief, she stated that her husband used to give her Rs. 500/ per month as pin money besides, meeting her expenses regarding food and clothing. Over and above this, he used to send money on the occasions of Id and Bakrid and also gave her money whenever she demanded. She constructed the Kothi at Aligarh by investing about Rs. 20,000/ . In other words she meant to convey in her examination in chief that she had acquired the land and constructed the Kothi out of the savings she had from the various amounts of money given by the Raja monthly or from time to time. At a later stage of her deposition (probably in cross examination) she demolished her case and claimed to be in possession of Rs. 50,000/ at the time of the death of her husband, 891 which sum was her total savings out of the money paid to her monthly or from time to time by the Raja. Thus in her evidence she could not explain as to out of which personal fund she claimed to have acquired the disputed property. The Civil Judge framed for trial several issues out of which issues 1 and 5 were, in the following terms "1. Whether the plaintiff is the owner of the property in suit as alleged and is she entitled to the possession claimed ? 5. Whether the defendant possesses the disputed property as the Mutawalli ' as alleged by him The defendant 's case was that the 'Patta ' was obtained by the old Raja tinder the influence of her young wife benami in her name though it was acquired with the waqf fund. The Raja, as Mutawalli, was the real lessee of the land. He had constructed the Kothi out of the income of the waqf property. A Mutawalli is not an owner of the waqf property, but whatever property of the waqf was there from before or acquired subsequently must, ordinarily, be in the name of the Mutawalli. A property could be acquired in the name of any beneficiary, like the plaintiff, but she would be; merely a benamidar of the Mutawalli and the property will be a waqf property. The Civil Judge has noted in his judgement that the plaintiff did not put forth a plea that the Kothi was built by late Raja out of his personal money and that she was owner, on the basis of the equitable deoctrine of advancement. He has said further: "Thus the only point on which the parties were at issue was with respect to the source of the money out of which the patta was obtained and the building constructed and the plaintiff could succeed only if she proved that she had obtained the patta and built the kothi out of the money given to her by her late husband as pocket expenses, etc. " The Civil Judge also remarked "Had she stated that she built the kothi out of the money which she had saved, that would have been consistent with her allegations in the plaint. But she admitted that the whole of her savings were still with her and that out of them she had spent a little when she filed the present suit." The Trial Court, thereafter, considered the voluminous documentary evidence in the light of the oral evidence adduced and came to the conclusion that the plaintiff did not provide any money either for the lease of the land or for the construction of the Kothi thereon and that the money for both the purposes was provided out of the waqf estate. Hence it was held, while deciding issues 1 and 5, that the plaintiff was not the owner of the Kothi in suit and the defendant was in possession of it in his capacity as the successor Mutawalli. 892 It would be advantageous to note at this stage the stand taken by the appellant in the High Court in her Memo of Appeal as also in argument. On perusal of the grounds set out in the Memorandum of Appeal, especially ground Nos. 6, 8, 9, 11, 13 and 27, it would appear that the case made out therein was that the Raja had his personal money kept in the waqf estate treasury alongwith the waqf money. The amount spent in constructing the Kothi was mostly taken out of the treasury from his personal fund with the intention of making his wife the owner of the property even though the doctrine of advancement did not apply in India, and that the observation of the learned Civil Judge that the plaintiff failed to prove that she did not provide any money out of her personal fund was wholly irrelevant for the decision of issue No. 1. In argument, however, a stand like the one taken in the Trial Court was reiterated but consistently and concurrently rejected because the evidence in favour of the defendant 's case was so overwhelming to show that the lease had been taken and the Kothi had been constructed with the money coming out of the waqf fund that no other view was reasonably probable to be taken. At one place in its judgment the High Court says "Counsel for the appellant has strongly relied on these documents in proof of the fact that the Kothi was constructed with her money and belonged to her." In the teeth of the overwhelming evidence the appellant was obliged to take 'an entirely new stand in her petition for special leave and in the argument before us. In paragraph 23 of the petition it was stated That the case of the applicant had been that the lease was obtained with the applicant 's funds and that she had constructed the Kothi with her own money and it was also her alternative case put forward before the Hon 'ble High Court that even if it be assumed that the money utilised for constructing the Kothi did not pass directly from the plain tiff 's hand: and even if it be the finding of the Court that the money so utilised bad proceeded from Raja Mahmudul Hasan then on the admitted case of the defendant that this fund was waqf fund, the plaintiff 's claim ought to have been decreed inasmuch as on the ground that the usufruct or the profit of the waqf property though arising out of the waqf property did not belong to waqf as waqf property but it was by its very nature the property of the beneficiary and in the absence of any evidence to the contrary Raja Mahmoodul Hasan. I held that those funds for the beneficiaries and the amount spent by him in the construction of the Kothi should be the money belonging to the applicant." Mr. Phadke made the following submissions (1) The Raja intended to acquire the land on lease and construct the Kothi for the plaintiff by investing from time to time money taken out of the waqf estate treasury, which had the effect of disbursement and payment of the money by the Mutawalli to his wife, 893 the beneficiary, for the purpose of the, acquisition of the Kohi. The source of Money in that event is immaterial. (2) The intention of the Raja to provide a separate Kothi to the plaintiff evidenced by numerous documents taken and standing in her name must be respected. (3) The Raja went on giving money in driblets for construction of the Kothi by taking out the money from the waqf fund from time to time. It was open to him to do so in accordance with clause 18 of the waqf deed Ext. (4) The intention of the Raja is further fortified 'by the recital in his Will Ext. (5) That there is a number of circumstances in support of the contentions aforesaid. (6) The rules of pleading should not be too strictly applied in India and no party should be defeated on that account when both sides adduced evidence and proceeded to trial of the real issues in the case 'with their full knowledge and understanding. (7) That there is no substantial variance in the case made out in the pleadings and the evidence and in argument either in the Courts below or in this Court. (8) The burden of proof to displace the ostensible title of the appellant and to show that she was a benamidar was on the respondent. In absence of any clinching evidence on either side, the ostensible title prevails. (9) Although the doctrine of advancement does not apply in India, the Mutawalli being the owner of the waqf property had full and unlimited power of disposal over its usufruct and income. Mr. Lal Narayan Sinha, while refuting the submissions made on behalf of the appellant, contended that it is a settled law that the question whether a particular transaction is, benami or not is purely one of fact and this Court in exercise of its jurisdiction under Article 136 of the Constitution does not, ordinarily and generally, review the comment findings of the Courts below in that regard. Counsel submitted that the Courts below had correctly applied the Muslim law applicable to Shias in respect of the waqf property and its income. They have rightly come to the conclusion that the suit property appertained to the waqf. It was clear, according to the submis 894 sion of Mr. Sinha, that the parties went to trial to prove their respective cases as to whether the property had been acquired with the personal funds of the Plaintiff or those of the waqf. The plaintiff 's case failed in view of the overwhelming evidence against her and she should not be permitted to make out an entirely new case in this Court. He also contended, firstly, that the theory of onus probandi is not strictly applicable when both parties have adduced evidence;in such a situation it becomes the duty ' of the Court to arrive at the true facts on the basis of reasonable probabilities. Secondly, in the instant case the strict tests to prove the benami character of the transaction cannot be applied, as, to do so will be in the teeth of the, well settled principles of Mohammedan law in relation to waqfs. We proceed to examine the correctness of the rival contentions of the parties but not exactly in the Order it has been stated above. It is undisputed in this case that a valid waqf was created by Smt. Sughra Begum. It is further indisputably clear from the waqf deed that except a portion of money which was to be spent for public, religious or charitable objects the waqf was primarily of a private nature for the benefit of the. settler 's family and their descendants, which is called wakf alal aulad. The ultimate object of the waqf was to spend income, if any, in the service of the Almighty God. In Abdul Fata Mahomed vs Rasamaya (1) their Lordships of the Privy Council held that the gift to charity was illusory, and that the sole object of the settler was to create a family settlement in perpetuity. The waqf of this kind was, therefore, invalid. Ibis decision aforesaid caused considerable dissatisfaction in the Mohammedan community in India. This led to the passing of the which was made retrospective in opera tion by a subsequent Act of 1930. In view of the Validating Act of 1913 the validity of the wakf was beyond the pale of challenge. Although in respect of the law applicable to waqfs there is some difference in regard to some matters between the Shia law and the various other schools of Mohamedan law applicable to Sunnis, in very many fields the law is identical. After the Validating Act of 1913, on the basis of the law as it prevailed even before, creation of a waqf for the purpose of the maintenance of the members of the waqif 's family and their descendants is also a charitable purpose. We now proceed to notice some salient features of the law as applicable to waqfs and especially of the Shias. Tyabji 's Muslim Law, Fourth edition, Chapter X deals with waqf. According to Shia law the waqf is irrevocable after possession is given to the beneficiaries or the Multawalli. The settler divests himself of the ownership of the property and of everything in the nature of usfufruct from the moment the wakf is created. In purely metaphorical sense the expression "ownership of God" is used but unlike Hindu Law, since conception of a personal God is not recognized, there is no (1) 22 Indian Appeals, 76. 895 ownership of God or no property belongs to God in the jural sense, although "the ownership of the property becomes reverted in God as he is originally the owner of all things" (vide page 523). The Shia authorities considered the property as transferred to the beneficiaries or to the object of the, waqf. Strictly speaking, the ownership of the waqf property has no jural conception with any exactitude. The corpus is tied 'down and is made inalienable. Only the usufruct and the income from the corpus of the waqf property is available for carrying out the objects of the wakf. The Sharaiu 'l Islam says "Waqf is a contract the fruit or effect of which is (a) to tie up the original and (b) to leave its usufruct free " "the waqf or subject of appropriation (corpus) is transferred, so to become the property of the mowkoof alehi, [or 'person on whom the settlement is made '] for he has a right to the advantage or benefits (usufruct) to be derived from it." (vide page 494, In the foot note at the same page occurs a passage which runs thus "But it should not be overlooked that question about ownership of property after dedication, refers merely to scientulla juris, supposed to remain undisposed of although entire usufruct, (all benefits, & C.) are assigned away. Question in whom property rests, therefore, entirely academical. " Mutawalli is like a Manager rather than a trustee (see page 498). The Mutawalli, so far as the waqf property is concerned, has to see that the beneficiaries got the advantage of usufruct. We have already pointed out that under the Shia law the property does not remain with the waqif. It is transferred to God or to the beneficiaries. At page 554 of Tyabji 's famous book it is stated : "The support and maintenance of the waqf 's family, & c. would seem under the Act to be deemed a purpose recognized by the Muslim law as religious, pious or charitable : section 2. This view was put forward by Ameer Ali, J., with great learning in his dissenting judgment in Bikani Mia 's case." ' Section 527 at page 593 runs thus "The mutawalli has no ownership, right or estate in the waqf property: in that respect he, is not a trustee in the technical sense : he holds the property as a manager for ful filling the purpose of the waqf. " A contrary statement of law at page 202 of Mullas Mohamedan Law, seventeenth edition based on the decision of the Allahabad High Court in Mohammad Qamar Shah Khan vs Mohammad Salamat Ali Khan(1) (1) A.I.R. 1933 Allahabad 407. 896 to the effect that "the mutawalli is not a mere superintendent or manager but is practically speaking the owner" is not correct statement of law. In a later Full Bench decision of the same court in Moattar Raza and others vs Joint Director of Consolidation, U.P. Camp at Bareilly and others(1) while over ruling the earlier decision, it has been said at pages 513 14 : "the legal status and position of a mutawalli under a waqf under the Musalman Law is that of a Manager or Superintendent. " The general powers of the Mutawalli as mentioned in section 529 of Tyabji 's book are that he "may do all acts reasonable and proper for the protection of the wakf property, and for the administration of the waqf. " It will be useful to point out the Law as regards, distribution of distributable income of the waqf properties amongst the beneficiaries as mentioned in the various subsections of section 545 at pages 606 608. Unless a different intention appear, subsection (4) says: "The benefit of a waqf for a person 's "sons and his children, and the children of his children for ever so long as there are descendants, is taken per capita, males and females taking equally and the children of daughters being included. " Attention must be called to an important statement of law in the well known authoritative book of Mohamedan Law by Ameer Ali Vol. 1, fourth edition, page 472. It runs thus : "It is lawful for a mutawalli with the income of a waqf to erect shops, houses, & c., which may yield profit to the waqf, as all this is for the benefit of the waqf. All properties purchased by the mutawalli out of the proceeds of the waqf become part of the waqf and are subject to the same legal incidents as the original waqf estate." Mr. Phadke cited the decision of this Court in Ahmed G. H. Ariff & Ors. vs Commissioner of Wealth Tax, Calcutta(2) and contended that the right of the beneficiaries to get money out of the income of the waqf property for their maintenance and support was their property. In our opinion the case does not help the appellant at an in regard to the point at issue. A hanafi Muslim had created a wakf alalaulad and on a proper construction of the relevant clauses in the waqf deed it was held that the aliquot share of the income provided for the beneficiaries was not meant merely for their maintenance and support but even if it was so, it would be an asset within the meaning of section 2 (a) of the Wealth Tax Act, 1957. The definition of the term 'asses, was very wide in the Wealth Tax Act. The share of the income which a beneficiary was getting under the said waqf was assessable to income tax and following the particular method of evaluation it was held to be an asset for the purposes of the Wealth Tax. The question at issue in the present case is entirely different as will be shown and discussed (1) A.I.R. 1970 Allahabad, 509. (2) ; 897 hereinafter. But in support of what we have said above in relation to the waqf property and the position of the Mutawalli we may quote a few lines from tills judgment also which am at page 24 : "As mentioned before, the moment a wakf is created, all rights of property pass out of the Wakif and vest in the Almighty. Therefore, the Mutawalli has no right in the property belonging to the wakf. He is not a trustee in the technical sense, his position being merely that of a superintendent or a manager. " It would be convenient to briefly discuss the questions of fact and the evidence in relation thereto before we advert to the discussion of some other questions of law argued before us on either side as those principles of law will be better"appreciated and applied in the. background of the facts of this case. As has been stated already the evidence is overwhelming on the question as to what was the source of money for the acquisition of the disputed property, either the land or the kothi. It came from the waqf fund. This position could not be seriously challenged before us. What was argued will be alluded to a bit later. We may just cursorily refer to some, of the pieces of the evidence on the question aforesaid. A 35 is a written direction by the Raja to Mahmud Syedullah Tahvildar directing him to debit a sum of Rs. 741/ to his personal account for the acquisition of the. plot in question. The details of the expenses and the Nazrana money are given therein. The payment was from the funds of the waqf estate. But the Raja made a feable and futile attempt to get this debit entry made as a repayment of the loan money said to have been advanced by him to the waqf estate. The High Court as also the Trial Court has rightly remarked that the entry like Ext. A443 was got made by the Raja in the account books of the waqf estate as a fictitious countervailing entry in his attempt to show that some of the sums of money which he had withdrawn from the waqf estate were on account of the repayment of his alleged loans. The High Court has rightly pointed out that they were all fictitious entries. Mr. Phadke endeavored to show that the approximate gross income of the waqf estate was not Rs. 43,515/ as is shown by the High Court but it was in the neighbourhood of Rs. 58,000/ . We shall accept it to be so. Thus the net distributable income at the disposal of the Raja was about Rs. 30,000/ instead of Rs. 15,5101 mentioned in the judgment of the High Court. There were 13 beneficiaries in qurra No. 1 of which the Raja was the Mutawalli. In that capacity he was getting a monthly allowance of Rs. 70/ only from the estate account. He bad no other personal property or source of income from which he could advance any loan to the waqf estate. Nor could it be shown that the waqf estate at any point of time was in need of any loan from the Raja. Therefore, the attempt of the Raja to put a show of acquiring the land in the name of his young wife out of his personal money was a very crude attempt to disguise the real source of that 898 money. The concurrent findings of the Courts below that the expenses for the acquisition of the lease were incurred from the waqf estate funds could not be successfully assailed. The High Court has referred next to the question of payment of rent of the land to the lessor. The plaintiff produced six rent receipts. 13 and 14 were of the year 1952 when disputes between the parties had started. As regards four other receipts the High Court was inclined to believe the explanation of the defendant that the plaintiff had surreptitiously obtained their possession. On the other band, the defendant filed four rent receipts of the period when the Raja was alive. Since the lease had been taken in the name of the plaintiff, naturally all the receipts were in her name. The High Court has also referred to the satisfaction of a decree for rent obtained by the lessor in a suit instituted against the plaintiff as well as the defendant and has come to the conclusion that the entire decretal amount, the expenses of the auction sale and the costs were deposited in the Court out of the waqf fund. Then comes the evidence regarding the construction of the Kothi. All documents for obtaining permission from 'be Municipal Board and for electric connection etc. obviously stood in the name of the plaintiff as the lease wag, standing in her name. As in the High Court, so here, Mr. Phadke strongly relied upon those documents to show that the Kothi was constructed for and on behalf of the plaintiff. As already stated the stand in the High Court was, that it was constructed with her money. Here it was a completely different stand. It was urged that the money came from the waqf fund but as and when the money was being spent by the Raja for the construction of the Kothi it amounted, in law, as payment of the money by the Raja to his wife and the construction of the Kothi should thus be treated as having been made with her money. We shall scrutinize the correctness of this branch of the argument a bit later. Numerous documents are mentioned in the judgments of the Trial Court as also of the High Court to show that every bit of expenditure in the construction of the Kothi came out of the ' waqf fund under the direction of the Raja. We need not discuss these documents in any detail as the concurrent finding of the Courts below could not be assailed in face of these documents and that led the appellant to make a somersault here and to take an ingenuous stand. These documents are Ext. A 449 series; Ext. A 450 series; Ext. A 452; Ext. A 453; Ext. A 455; Ext. A 458; Ext. A 460; Ext. A 463; Ext. A 486; Ext. A 491; Ext. A 493 series; Ext. A 495 and Ext. A 518. A 3 shows that Ramlal, a mason who had worked as a contractor in the construction of the Kothi instituted a suit for recovery of Rs. 2,917/10/ , the amount which was not paid during the life time of the Raja. The suit was instituted in the year 1941. It was decreed in 1942. A 36, A 43 and A 44 are the receipts in proof of the fact that eventually the decree was satisfied by the defendant on payment of money to Ramlal. A 45 is a similar receipt dated January 2, 1942 showing payment of Rs. 923/ by the defendant to Zafaruddin in satisfaction of his decretal dues on account of the construction of the Kothi. The 899 plaintiff 's claim of the payment of Rs. 2,000/ to Ramlal was too slippery to be accepted by the Courts below and it need not detain us either. The High Court has also relied upon two letters Exts. A 28 and A 27 written by the Raja to the Supervisor of the building operations indicating that if the foundation of the Kothi was not laid within a certain time, loss would be caused to the Riyasat namely the waqf estate. It may be emphasised here that the countervailing fictitious entries got made by the Raja were very few and far between and the entire amount spent in the acquisition of the Kothi which was in the neighbourhood of Rs. 21,000/ (both for the land and ,the building) could not be. shown to be the personal money of the Raja by this spurious method. A major portion of the total amount obviously, clearly, and admittedly too, had come from the waqf fund., And that compelled the appellant to take an entirely new stand in this Court. We now proceed to deal with the new stand. It is necessary in that connection to refer to some of the important recitals in Ext. A 2 the waqf deed. In the preamble of the document it is recited that the waqf is being created with some religious purposes and for the regular support and maintenance of the descendants of the waqif for all times to come so that they may get their support from generation to generation. The ultimate object is for charitable purposes in the service of the God Fisaliilah. After referring to the Act of 1913 it is stated : "Hence the entire property given below having become Waqf Alal aulad in perpetuity, has become, uninheritable and non transferable". Each Mutawalli of his respective qurra was appointed " the principal manager with full and complete powers of entire waqf property." From clauses 7 and 13 of the waqf deed it was rightly Pointed out on behalf of the appellant, and not disputed by the respondent either, that Rs. 6,000/ amiually had to be spent by Mutawalli of qurra No. 1 for the religious purposes mentioned therein. This was the first obligation of the Mutawalli before he could apply the rest of the usufruct in the support and maintenance of the family beneficiaries. Then comes the most important clause in the waqf deed namely clause 18. The said clause as translated and printed in the paper book runs as follows "Syed Mahmood Hasan the Mutawalli of the, first lot is vested with the power to fix stipends for his children and their descendants and for his wives during his life time whatsoever he pleases or to lay down conditions by means 0 a registered document or may get any writing kept reserved in the custody of the district judge, so that after him it be binding upon every Mutawalli, such in case he might not get any writing registered or kept in the custody of the district judge of the district, then under such circumstances the twenty percent (20%) of the income of the waqf property having been set apart for the expenditure of collection and realisation and right of the, Mutwalliship and the amount of Rs. 6,000/ (Rupees six thousand) for meeting 900 the expenditure of Azadari ' as detailed at para No. 7 above; the entire remaining will be distributed among the heirs of Mahmood Hasan according to their respective legal share provided under Mohammadan Law. " The High Court referring to this clause has said that the power given to the Raja in clause 18 could be exercised by him during his life time in the fixation of the stipends but it was to come in operation after his death. With the help of learned counsel for both sides,. we looked into the original clause 18 and found that there is some inaccuracy in the translation as made and printed in the paper book. But substantially there is not much difference. Correctly appreciated, the meaning of the clause is that Saiyed Mohammad Hasan, the Raja, was given a special power and right to fix stipends for his children, wives and descendants either by a registered document and or by a document in writing kept in the custody of the District Judge so that after him it may be binding on every subsequent Mutawalli. If he failed to do so, then after setting apart 20% of the gross income to meet the expenditure of collection and realisation and Rs. 6,000/the charitable expenditure mentioned in clause 7, the balance was to be distributed amongst the heirs of Saiyed Mohammad Hasan according to their respective legal shares provided under the Mahomedan law. The bone of contention between the parties before us was that according to the appellant such a power of fixation of stipends for the wives and children was given to the Raja even to be operative during his life time, while according to the respondent it was only to be effective after his death. We do not think it necessary to meticulously examine the terms of clause 18 and resolve this. difference. We shall assume in favour of the respondent that, in terms, the power was given which was meant to be operative after his death. But then, does it stand to reason that he had no such power during his life time ? On a reasonable view of the matter, either by way of construction of clause 18, or as a necessary implication of it, we find no difficulty in assuming in favour of the appellant that the Raja was vested with the power to fix stipends for his children and their descendants and for his wives during his life time also. A question, however, arises was this power completely unfettered, unguided and not controlled by the general principles of Mohamedan law ? Apart from the fact that in clause 27 of the waqf deed it is specifically mentioned that any condition or phrase laid down in any of the paras of the waqf deed was not meant to go against the, Mohamedan law and was not to be of any effect, if it did so, it is difficult to conclude that the Raja was conferred an absolute power or discretion to fix any stipend for any beneficiary and no stipend for some beneficiary. Equality amongst all is a golden thread which runs throughout the Mohamedan law. It is a chief trait of that law. We have already pointed out from Tyabji 's book that each beneficiary was entitled to share the usufruct of the waqf property per capita. The Power given to the Raja under clause 18 had to be reasonably exercised within a reasonable limit of variation according to the exigencies and special needs of a particular beneficiary. He had no power to spend money quite disproportionately for the benefit of one 901 beneficiary may she be his young wife or young daughter or be he a young son. He had no power to spend money for acquisition of any immovable property for a beneficiary. No income from the waqf estate could be, spent for acquisition of an immovable property, and particularly a big property with which we are concerned in this case, to benefit only one beneficiary ignoring the others who were about a dozen. The money had to be spent equitably for the support and maintenance of each and every beneficiary. Of course, the Raja had the discretion to spend more money say on the education of a particular beneficiary it was necessary to do so or for the treatment of an ailing one. There it would be preposterous to suggest that money bad to be equally spent. It is, however, difficult to spell out from Clause 18, as was argued by Mr. Phadke, that the Raja should be deemed to have fixed as stipends for the young lady all the numerous sums of money spent from time to time in the various items of the acquisition of land or the construction of the Kothi. Such a construction will, not only militate against the tenets of the Mahomedan law as quoted from Ameer Ali 's book, but would be obviously against the spirit of clause 24 of the waqf deed itself. The said clause says "If any property will be purchased out of the funds of the State, it shall also be deemed to be property included in and belonging to the waqf. It shall not become the private or personal property of any one. " Taking a permanent lease of the land and constructing a Kothi thereupon to all intents and purposes, is a purchase of the property out of the funds of the estate. It will be a startling proposition of Mahomedan law to cull out from clause 1 8 of the waqf deed that a property acquired obviously and clearly out of the funds of the waqf estate in the name of one of the beneficiaries should be treated as having been acquired for him or her in exercise of the power under clause 18. It should be remembered that apart from the properties which were mentioned in the waqf deed and which had been tied and made inalienable if any further property was to be acquired, in the, eye of law, according to the concept of Mahomedan law, there was no legal entity available in whose name the property could be acquired except the Mutawalli or the beneficiary. Unlike Hindu law, no property could be acquired in the name of the God. Nor could it be acquired in the name of any religious institution like the waqf estate. Necessarily the property had to be taken in the name of one of the living persons. Ordinarily and generally the acquisition of property out of the waqf funds should have been made in the name of the Mutawalli. But it did not cease to be, a waqf property merely because it was acquired in the name of one of the beneficiaries. We are empbasizing this aspect of the matter at this stage to point out that the law relating to benami transactions, strictly speaking, cannot be applied in all its aspects to a transaction of the kind we are concerned with in this case. We, however, hasten to add that even if applied, there will be no escape from the position that the real owner of the property was the Raja in his capacity as Mutawalli and the plaintiff was 902 a mere benamidar. The property in reality, therefore, belong to the waqf estate as concurrently and rightly held by the two courts be low. It is a very novel and ingenuous stand which was taken in this Court to say that all money spent from time to time in acquiring the land and constructing the Kothi was payment by the Raja as Mutawalli to his wife and therefore the property must be held to have been acquired by the lady herself out of her own personal fund. At no stage of this litigation except in this Court such a case was made out in pleading or evidence or in argument. The defendant was never asked to meet such a case. Parties went to trial and evidence was adduced upon the footing that the plaintiff claimed that out of the money given to her by the Raja as pin money or on the occasions of festivals or otherwise she had saved a lot and out of those savings she had spent the money in acquiring the property. The defendant asserted and proved that the case of the plaintiff was untrue and that all the money came from the waqf fund directly to meet the cost of the ac quisition of the property. In such a situation it is difficult to accept the argument put forward by Mr. Phadke that pleadings 'should not be construed too strictly. He relied upon three authorities of this Court in support of this argument namely, (1) Srinivas Ram Kumar vs Mahabir Prasad and others(1); (2) Nagubai Ammal & others vs B. Shama Rao & others(2), and (3) Kunju Kesavan vs M. M. Philip I.C.S. and others(3). Let us see whether any of them helps the appellant in advancing her case any further. In the case of Srinivas Ram Kumar (supra) the suit for specific performance of the contract failed. The defendant had admitted the receipt of Rs. 30,000/ . In that event, it was held that a decree could be passed in favour of the plaintiff for the recovery of Rs. 30,000/ and interest remaining due under the agreement of loan pleaded by the defendant, even though the plaintiff had not set up such a case and it was even inconsistent with the allegations in the plaint. The Trial Court had passed a decree for the sum of Rs. 30,000/ . The High Court upturned it. In that connection, while delivering the judgment of the Court, it was observed by Mukherjea J., as he then was, at page 282 : "The question, however, arises whether, in the absence of any such alternative case in the plaint it is open to the Court to give him relief on that basis. The rule undoubtedly is that the Court cannot grant relief to the plaintiff on a case for which there was no foundation in the pleadings and which the other side was not called upon or had an opportunity to meat. But when the alternative case, which the plaintiff could have made, was not only admitted by the defendant in his written statement but was expressly put forward as an answer to the claim which the plaintiff made in the suit, there would be nothing improper in giving the plaintiff a decree upon the case which the defendant him self makes." (1) ; (2) ; (3) [1964]3 S.C.R. 634. 903 In the instant case, there is no question of giving any alternative relief to the plaintiff. The relief asked for is one and the same. The plaintiff claimed that she had acquired the property with her personal funds. The defendant successfully combated this case. He had not said anything on the basis of which any alternative relief could be given to the plaintiff. The facts of the case of Nagubai Ammal (supra) would clearly show that the decision of this Court does not help the appellant at all. The respondent did not specifically raise the question of his pending in his pleading nor was an issue framed or. the point, but he raised the question at the very commencement of the trial in his deposition, proved relevant documents which were admitted into evidence without any objection from the appellants who filed their own documents, cross examined the respondent and invited the Court to hold that the suit for maintenance and a charge and the connected proceedings evidenced by these documents were collusive in order to avoid the operation of section 52 of the Transfer of Property Act. The matter was decided with reference to section 52. In such a situation it was held by this Court that the decisions of the Courts below were correct and in the facts and circumstances of thecase the omission of the respondent to specifically raise the questionof his pending in his pleading did not take the appellants by surprise. It was a mere irregularity which resulted in no prejudice to the appellants. In the instant case no body at any stage of the litigation before the appeal came up to this Court had taken any stand or said a word any where that money spent in acquisition of the property was the personal money of the plaintiff because as and when the sums were spent they went on becoming her personal money. The evidence adduced and the stand taken in arguments were wholly different. No party had said anything on the lines of the case made out in this Court. Similar is the position in regard to the decision of this Court in the case of Kunju Kesavan. At page 648 Hidayatullah J., as he then was,has stated, "The. parties went to trial fully understanding the central fact whether the succession as laid down in the Ezhava Act applied to Bhagavathi Valli or not. The absence of an issue, therefore, did not lead to a mis trial sufficient to vitiate the decision. " It was further added that the plea was hardly necessary in view of the plea made by the plaintiff in the replication. Mr. Lal Narayan Sinha placed reliance upon the decision of this Court in Meenakshi Mills, Madurai vs The Commissioner of Income tax, Madras(1) in support of his submission that the question of benami is essentially a question of fact and this Court would not ordinarily and generally review the concurrent findings of the courts below in that regard. Mr. Phadke submitted that his case was covered by some exceptionscarved out in the decision of the Federal Court in Gangadara Ayyarand others vs Subramania Sastrjgal and others.(2) (1) ; (2) A.T.R. 904 In our opinion it is not necessary to decide as to on which side of the dividing line this case falls in the light of the principles enunciated, in the case aforementioned. Truly speaking, the concurrent findings of the Courts below on the, primary facts could not be seriously challenged. They are obviously correct. But a new stand was taken on ' the basis of clause 18 of the waqf deed which we have already discussed and rejected. Mr. Phadke, heavily relied upon clause 19 of the Win dated 17 6 1938 Ext. 15 executed by the Raja fixing various amounts of stipends to be paid to the beneficiaries after his death. He had executed two other wills prior to this Will. In an earlier litigation, a question had arisen as to which Will would prevail the first one or the last one. The amounts fixed for the plaintiff in the last Will was much higher than the amount fixed for her in the first Will. in an earlier judgment dated 3 9 1949 Ext. 3 which was a judgment inter partes it was held that the amount fixed in the first Will would prevail. Clause 18 of the waqf deed was also interpreted in a particular manner. Mr. Lal Narayan Sinha endeavoured to use this judgment operating as res judicata in regard to some of the questions falling for decision in this litigation. We do not propose to make use of that judgment in that form. Nor do we propose to express any final opinion as to which amount of stipend was effective the first one or the last one. shall assume in favour of the plaintiff that the. amount fixed by the last Will was effective and binding on the subsequent Mutawalli. We are, however, concerned to read clause 19 of the last Will which runs as follows "My wife Siddique Fatima has got a kothi known as (main (?) Shagird Pasha in mauza Doodhpur (paper torn) by taking on perpetual lease. I or the state has no concern with the same. It has been 'constructed by her with her own funds. All the articles lying there belong to her and have been purchased by her from her own money. I have certainly given some articles to her which belonged to me personally. In short all the articles, of whatever sort they may be are her property and nobody has got any right in respect thereof because the state or any one else has got no concern or right in respect thereof. Hence she(?) has got the right to dispose the same off or to make a waqf of the same. She may give it to any of my sons, who renders obedience and service to her or may give the same to any of my grandsons. My other heirs shall have no right in respect thereof. If any body brings, any claim, in order to harass her, the same shall be false. " Let us see whether this clause advances the case of the appellant any further. On a close scrutiny, it would be found that it directly demolishes her stand taken in this Court. The recital by the Raja in clause 19 is that his wife bad taken the perpetual lease and constructed the kothi with her own funds. All the articles lying there have been purchased by her from her own money. He had certainly given some articles to her which belonged to him personally. There is 905 no recital that the Raja had constructed the kothi ',for the plaintiff out of his own funds nor was there a recital that he had constructed the kothi by taking the money from the waqf estate and treating it as payment of stipends to her as and when the sums of money were paid. By no stretch of law such a recital could create a title in favour of the plaintiff and finish the right of the, waqf to the property. The recital was demonstrably false and could not bind the subsequent Mutawalli. If the property became the acquired property of the waqf a Mutawalli,as the Raja was, by his mere declaration contained in clause 19 ofthe Will could not make it a property of the lady. The recital of fact could be pressed into service only to lend additional support to the plaintiff 's case if she would have stuck to that case and proved it by evidence aliunde. The appellant 's counsel relied upon the various circumstances to, advance her case in this Court the foremost of them is based upon clause 18 of the waqf deed, which we have already dealt with. It was next contended that the real question was that the property was of waqf alal aulad of which the main object was the maintenance and support of the members of the settler 's family and to tie up the corpus of the property in perpetuity so as to, make it inalienable. The Raja, however, according to the submission was left free duringhis life time to make disbursement of the income in any manner he chose and liked. Acquiring a property with the waqf fund was the fulfillment of the object of the wakf. It was a part of making a provision for the maintenance and support of the wife of the Mutawallii. It was an integral part of the object of the waqf and was not in breach of the trust. We are not impressed with this argument and have already dealt with it in the earlier portion of this judgment. True it is that the property was not acquired by the sale of the corpus of any of the waqf property but even acquisition of an immovable property directly with the, waqf fund was an accretion to the waqf property. The Raja had no power while administering the waqf to acquire a property for a particular beneficiary by way of maintenance and support of such a beneficiary. As indicated earlier, a Mutawalli of a waqt although not a trustee in the true sense of the terms is still bound by the various obligations of a trustee. He like a trustee or a person standing in a fiduciary capacity, cannot advance his own interests or the interests of his close relations by virtue of the position held by him. The use of the funds of the waqf for acquisition of a property by a Mutawalli in the name of his wife 'would amount to a breach of trust and the property so acquired would be treated as waqf property. In the tenth edition of The Law of Trusts by Keaton and Sheridan it has been pointed out at page 329, Chapter XX "The general rule that a trustee must not take. heed of one beneficiary to the detriment of others has already been discussed. Put in another way, the rule implies that although a trustee, may be the servant of all the beneficiaries, he is not the servant of any one of them, but an arbitrator, who must hold the scales evenly. " The position of the Mutawalli under the. Mahomedan law is in no way different and all the beneficiaries are entitled to benefit equally, 7 329 SCI/78 906 of course, subject to the special power conferred on the Mutawalli as the one provided in clause 18 of the waqf deed and to the extent and in the manner interpreted by us above. Exhibit A 22 an account of daily expenses incurred in the construction of the Kothi was attacked as a spurious document. we do not attach much importance to Ext. A 22 in face of the other pieces of evidence to indicate that the expenses were all met from the waqf fund. It is not necessary to lay any stress on Ext. A 22 Our attention was drawn to some statements made in the testimony of the defendant himself who was examined as D.W. 2 and D.W. 1the brother of the Raja. It may be mentioned here that Hamid Hasan brother of the defendant was examined at P.W.3. The plaintiff had examined herself in the house in which P.W. 3 was living and in his presence. Without discussing in any detail a few lines here for a few lines there in their evidence, suffice it to say that their evidence could not and did not establish the plaintiffs case as made out in the Courts below nor did they lend any support to the new case made out here. We, therefore, do not think it necessary to encumber this judgment by a detailed discussion of the evidence, because it has all been dealt with in full by the Trial Court and to a large extent by the High Court also. We now proceed to consider, the law of benami prevalent in India and especially in regard to acquisition of a property by the husband in the name of the wife. We would also in this connection be discussing whether the, doctrine of advancement is applicable in India or any principle analogous to that can be pressed into service on behalf of the appellant as was sought to be done by her learned counsel. Alongwith the discussion of the points aforesaid, we shall be adverting to the appellant 's argument of burden of proof being on the person to prove that a transaction which is apparent on the face of the document of title is not a real one but a benami deal. In conclusion, we shall show that neither the Trial Court nor the High Court has deviated from the application of the well settled principles in this regard, although at places the Trial Court seems to have apparently thrown the onus on the plaintiff. But as a matter of fact neither of the two Courts below has committed any error in the application (,it the real principle. In Gopeekrist Gosain and Gungaparsaud Gosain(1) it was pointed out as early as 1854, at page 72 : "It is very much the habit in India to make purchases in the names of others, and, from whatever cause or causes the practice may have arisen, it has existed for a series of years, and these transactions are known as "Benamee transactions." Lord Justice Knight Bruce proceeds to observe further at Pages 7475 that if the money for acquisition of property has been provided by a person other than the individual in whose name the purchase was effected and if such a person was a stranger or a distant relative of the person providing the money,, "he would have. been prima (1)6 Moore 's Indian Appeals, 53. 907 facia a trustee". It was observed further that even when the purchaser was the son of the real purchaser the English doctrine of advancement was not applicable in India. This case was followed by the Board in Bilas Kunwar and Desraj Ranjit Singh and others(1) Sir George Farwell has said at page 205 : "The exception in our law by way of advancement in favour of wife or child does not apply in India : Gopeekrist vs Gangaparsaud; (1854) 6 Moo, Ind. Ap. 53 but the relationship is a circumstance which is taken into consideration in India in determining whether the transaction is benami or not. The general rule in India in the absence of all other relevant circumstances is thus stated by Lord Campbell in Dhurm Das Pandey vs Mussumat Shama Soondari Dibiah (1843) 3 Moo. Ind. Ap. 229; "The criterion in these cases in India is to consider from what source the money comes with which the purchase money is paid." Lord Atkinson reiterated the same view in Kerwick and Kerwick (2) at page 278 in these terms : "In such a case there is, under the general law in India, no presumption of an intended advancement as there is in England. " It will be useful to quote a few lines from the judgment of the Judicial Committee of the Privy Council delivered by Sir John Edge in the case of Sura Lakshmiah Chetty and others vs Kothandarama Pillai ( 3 ) The lines occurring at page 289 run thus : "There can be no doubt now that a purchase in India by a native of India of property in India in the name of his wife unexplained by other proved or admitted facts is to be regarded as a benami transaction, by which the beneficial interest in the property is in the husband, although the ostensible title is in the wife. The rule of the law of England that such a purchase by a husband in England is to be assumed to be a purchase for the advance ment of the wife does not apply in India. " In the well known treatise of the law of Trusts referred to above the learned authors say at page 173 : "The best example of a trust implied by law is where property is purchased by A in the name of B; that is to say, A supplies the purchase money, and B takes the conveyance. Here, in the absence of any explanatory facts, such as an intention to give the property to B, equity presumes that A intended B to hold the property in trust for him. " It may here be made clear that much could be said in favour of the appellant if the Raja would have acquired the property with his own money intending to acquire it for her. But such an intention was of (1) 42 Indian Appeals, 202. (2) 47 Indian Appeals, 275. (3) 52 Indian Appeals, 286. 908 no avail to the appellant when the money for the acquisition of the property came from the coffers of the waqf estate over which the Raja had no unbridled or uncontrolled power of ownership. He was himself in the position of a trustee owing a duty and obligations to the beneficiaries. He had no free volition in the matter to spend and invest the trust fund in any manner he liked and for showing undue advantage to his wife. At one stage of the argument Mr. Phadke felt persuaded to place reliance upon the decision of Yorke and Agarwal JJ in Mt. Sardar Jahan and others vs Mt. Afzal Begam(1). At page 291, column 1 the observation seems to have been made per in curium to the effect: "As regards this question of pleading, it does not appear to us that there was anything to prevent the plaintiff from falling back on the plea of advancement in case she was unable to satisfy the court that the moneys expended were her own." Yorke J realised the inaccuracy of the above proposition and said so in Mt. Siddique Begam vs Abdul Jabber Khan and others(2) and then concluded at page 312 column 1 thus : "In point of fact it has been laid down by their Lordships in earlier cases that the burden of proof that a transfer is benami does lie in the first instance upon the person asserting it to be so, but that burden is discharged upon the said person showing that the purchase money was provided by him. " In the case of Gangadara Ayyar and others (supra) Mahajan J., enunciated the law pithily, if we may say so with respect, in paragraph 14 at page 92 : "It is settled law that the onus of establishing that a transaction is benami is on the plaintiff and it must be strictly made out. The decision of the Court cannot rest on mere suspicion, but must rest on legal grounds and legal testimony. In the absence of evidence, the apparent title must prevail. It is also well established that in a case ' where it is asserted that an assignment in the name of one person is in reality for the benefit of another, the real test is the source whence the consideration came and that when it is not possible to obtain evidence which conclusively establishes or rebuts the allegation, the case must be dealt with on reasonable probabilities and legal inferences arising from proved or admitted facts. " While dealing with the question of burden of proof, one must remember a very salutary principle reiterated by this Court in Kalwa Davadattam and two others vs The Union of India and other(3) at page 205. Says the learned Judge: (1) A.I.R. 1941, oudh, 288. (2) A.I.R. 1942, Allahabad, 308. (3) ; 909 The question of onus probandi is certainly important in the early stages of a case. It may also assume importance where no evidence at all is led on the question in dispute by either side; in such a contingency the party on whom the onus lies to prove a certain fact must fail. Where however evidence has been led by the contesting parties on the question in issue, abstract considerations of onus are out of place; truth or otherwise of the case must always be adjudged on the evidence led by the parties." Shinghal J. recently followed this dictum in the case of Union of India vs Moksh Builders and Financiers Ltd. and ors. etc.(1) at page 973. Mr. Phadke heavily relied upon the decisions of this Court in (1) Kanakarathanammual vs V. section Loganatha Mudaliar and another(2) (2) Jaydayal Poddar (deceased) through his L. Rs and another vs Mst. Bibi Hazra and ors(3) and (3) Krishnanand vs The State of Madhya Pradesh (4). A question of some fine distinction arose in Kanakarathanammal 's case. The question was whether the property purchased in the name of the wife by the money given to her by the husband was a property gifted to her under section 10(2) (b) of the Mysore Hindu Law women 's Rights Act, 1933 or was it a property in which fell under clause (d) of section 10(2). If it was a property gifted by the husband to the wife, then the appellant 's contention was right and it became a property gifted under section 10(2) (b). If, on the other hand, it was a property purchased with the money gifted by the husband to the wife, then it would not be so. According tothe finding of the Courts below, the whole of the consideration waspaid by the appellant 's father and not by her mother. The majorityview expressed by Gajendragadkar J., as he then was, at page 9 of the report is : "We have carefully considered the arguments thus presented to us by the respective parties and we are satisfied that it would be straining the language of section (2)(b) to hold that the property purchased in the name of the wife with the money gifted to her by her husband should be taken to amount to a property gifted under section 10(2) (b). " It would thusbe seen that indisputably in that case the property was of the wife. The only dispute was whether the property itself was acquired as agift from her husband or it was acquired with the money gifted to her by the husband. In our opinion, therefore, this case is of no help, to the appellant in this appeal. In Jaydayal Poddar 's case (supra) one of us (Sarkaria J.) while delivering the judgment on behalf of the Court was dealing with a case where the question was whether the property purchased by Abdul Karim in the name of his wife Mst. Hakimunnissa was a benami purchase in the name of the latter. The Trial Court held that she was benamidar. The High (1) ; (2) ; (3) (4) [1977]1 S.C.R. 816. 910 Court reversed the decision and held that the plaintiffs had failed to show that Mst. Hakimunnissa in whose name the sale deed stood, was only a benamidar and not the real purchaser. While affirming the view of the High Court, it was aptly said at pages 91 92 : "It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of Benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of a benami is the intention of the party or parties concerned; and not unoften such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him; nor justify the acceptance of mere conjectures or surmises, as a substitute for proof. The reason is that a deed is a solemn document prepared and executed after considerable deliberation and the person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his ' favour that the apparent estate of affairs is the real state of affairs. Though the question, whether a particular sale is Benami ornot, is largely one of fact, and for determining this question,no absolute formulae or acid tests, uniformally applicable inall situations, can be laid down; yet in weighing the probabilities and for gathering the relevant indicate, the courts are usually guided by these circumstances : (1) the source from which the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship, if any between the claimant and the alleged benamidar; (5) the custody of the title deeds after the sale and (6) the conduct of the parties concerned in dealing with the property after the sale. The above indicate are not exhaustive and their efficacy varies according to the facts of each case. Nevertheless No. 1, viz. the source whence the purchase, money came, is by far the most important test for determining whether the sale standing in the name of one person is in reality for the benefit of another." Apart from the fact that in the present appeal we are not concerned with a simple case of purchase of the property by the husband in the name of the wife with his own money, the purchase being with the waqf money, even applying the principles extracted above it would be noticed that the concurrent findings of the courts below that the appellant was benamidar on behalf of the waqf does not suffer from any infirmity to justify our interference with the said finding. ] 'lie burden has been strictly discharged by the respondent so much 911 so that the finding as recorded could not be assailed. It was merely attempted to be availed of to support a new case in this Court. It should be remembered that 'by far the most important test for determining whether the sale standing in the name of one person is in reality for the benefit of another ' namely the source whence the purchase money came has been established beyond doubt. The nature and possession of the property after the acquisition was such that it did not lead to the conclusion that it was not a waqf property and was a property in exclusive possession of the appellant through her tenants including tile respondent. The motive to, acquire the property in the name of the wife is clearly spoken of by D.W.I.brother of the Raja when he said at page 37 of the paper book "Raja Sahib was also present at the time of the execution of the lease. At that time there was no debt against him. On being asked by me he said that the plaintiff used to, trouble him and that in order to please her he was getting a fictitious lease executed in her favour. " It was argued for the appellant that the Raja wanted to make a provision for his young wife to protect her interests from being trampled with by her sons and daughters. This is not correct. Although the defendant was not pulling on well with the Raja after he had married the plaintiff, according to her own case pleaded 'in the plaint she was pulling on well with the defendant upto the year 1950 and the relations between them got strained when her daughter was married to Saiyed Mohammed Raja Ali Khan. The position of the parties, namely, the Raja and the plaintiff, was such that one could be inclined to believe that in all probability the Raja could provide funds for acquisition of the property not only in the name of his wife but for her and her alone provided the funds expended were his personal funds. But no such inference is possible on the unmistakable position of thiscase that the funds came from the coffer of the waqf estate. The custody of the title deed and other papers, except a few, were not with the plaintiff. But on the facts of this case one, cannot attach much importance to this circumstance either way. The conduct of the parties concerned in dealing with the property after acquisition also goes in favour the defendant and against the plaintiff. It could not be shown that the plaintiff bad realised rent from the other tenants who had been there in the Kothi before 1947. Nor was there anything to show that the defendant himself was inducted as a tenant in the Kothi by the plaintiff. We, therefore, hold that even on the application of the salutary principles of law enunciated in Jaydyal Poddar 's case the appellant cannot succeed. This case was merely followed in Krishnanand 's case by Bhagwati J. We may again emphasize that in a case of this nature, all the aspects of the benami law including the question of burden of proof cannot justifiably be applied fully. Once it is found, as it has been consistently found, that the property was acquired with the money of with the money of the waqf, a presumption would arise that the property is a waqf property irrespective of the fact as to in whose name it was acquired. The Mutawalli by transgressing the limits of his power and showing undue favour to one of the beneficiaries in disregard to a large 912 number of other beneficiaries could not be and should not be permitted to gain advantage by this method for one beneficiary which in substance would be gaining advantage for himself. In such a situation it will not be unreasonable to say rather it would be quite legitimate to infer, that it was for the plaintiff to establish that the property acquired was her personal property and not the property of the waqf Is it possible to decree her appeal in face of her three varying stands in the three courts ? They are (1) in the Trial Court case of acquisition of property with her personal money; (2) in the High Court acquisition of property with the personal money of her husband and (3) in this Court the waqf fund invested from time to time became her personal money and enabled her to acquire the property. For the reasons stated above, we dismiss the appeal, but with this direction that the parties will bear their own costs throughout. Before we part with this case, we would like to put on record that a suggestion was thrown from the Court to the parties to arrive, at some kind of lawful settlement which may not go against the terms of the waqf deed or the Mahomedan law in relation to waqf. Pursuant to the said suggestion, an offer was made on behalf of the substituted respondents to pay a sum of Rs. 30,000/ to the, appellant within a period of one year. This was on the footing, as suggested by the Court, as if the lease hold in the land upon which the Kothi stands was the property of the appellant, but the Kothi was of the waqf. Unfortunately this offer was not accepted by the appellant. Still we hope and trust that the respondent will honour their unilateral offer and pay the sum of Rs. 30,000/ to the appellant within a period of one year from today, preferably in 4 three monthly equal instalments of Rs. 7,500/ each. The amount so paid would be over and above the duty and the obligation which is there under the waqf on the present Mutawalli out of the substituted respondents. We have tried to take a compassionate view for the appellant to the, extent to which we thought we could justifiably go. We have relieved her of costs in all the three Courts. We believe that the respondents will not belie our hopes merely because an executable decree in respect of the sum of Rs. 30,000/ in absence of them acceptance of the offer by the appellant cannot be passed. S.R. Appeal dismissed.

One Smt. Sughra Begum, a Shia Muslim lady was possessed of vast Zamindari and other properties. On October 6, 1928, she created a waqf of the entire properties dividing them in three qurras, Raja Haji Saiyed Mohammad Mahmood Hasan was appointed by the waqifa as the Mutawalli of qurra No. 1. After the death of his first wife Smt. Akbari Begum. the Raja took the plaintiff appellant as his second wife in the year 1933. On January 22, 1935, a permanent lease was executed on behalf of one Saiyad Anwarul Rahman in respect of the disputed land in the name of the plaintiff. The rent fixed was Rs. 80/per year. Between the years 1937 and 1939 a bungalow was constructed on the said land which was named as "Mahmood Manzil". The Raja died in September, 1939. The plaintiff appellant filed a suit No. 86 of 1952 in the Court of the Civil Judge, Aligarh in which the original respondent was the sole defendant. The plaintiffs case was that the disputed property belonged to her and that the defendant was inducted as a tenant of the 'kothi ' on and from 1 3 1947 on a rental of Rs. 60/ p.m., that he paid rent upto May 1950, but did not pay any rent thereafter, that she served a notice on him to pay the arrears of rent and deliver vacant possession of the Kothi. The defendant respondent pleaded inter alia that Raja Sahib, the first Mutawali of qurra No. 1 had acquired the lease of the land and constructed the Kothi with the waqf fund as Mutawalli of the waqf and therefore it was a waqf property, that after the death of the Raja, he became the Mutawalli of qurra No. 1 including the Kothi in question and that he occupied the Kothi as a Mutawalli and not as a tenant. The Trial Court accepted the case of the defendant, rejected that of the plaintiff and dismissed her suit. Her appeal before the High Court was dismissed. Dismissing the appeal by special leave, the Court HELD : 1. According to Shia law, the waqf is irrevocable after possession is given to the beneficiaries or the Mutawalli. The settler divests himself of the ownership of the property and of everything in the nature of usufruct from, the moment the waqf is created. In pure metaphorical sense, the expression "ownership of God" is used but unlike Hindu law, since conception of a personal God is not recognised there is no ownership of God or no property belongs to God in the jural sense, although "the ownership of the property becomes reverted in God as he is originally the owner of all things". The property is considered as transferred to the beneficiaries or the Mutawalli for the object of the waqf. Strictly speaking, the ownership of the waqf property has no jural conception with any exactitude. The corpus is tied down and is made inalienable. Only the usufract and the income from the corpus or the waqf property is available for carrying out the objects of the waqf. Creation of waqf for the purpose of maintenance of the waqif 's family and their descendants is also a charitable purpose. [894 G 14, 895 A B] 2. A Mutawalli is like a manager rather than a trustee. The Mutawalli, so far as the waqf property is concerned, has to see that the beneficiaries got the advantage of usufruct. The Mutawalli may do all acts reasonable and proper for the protection of the waqf property, and for the administration of the waqf. [895 E, 896 D] 887 2(a) A Mutawalli of a waqf although not a trustee in the true sense of the term is still bound by the various obligations of a trustee. He like a trustee or a person standing in a fiduciary capacity cannot advance his own interests or the interests of one class of relations by virtue of the position held by him. The use of the funds of the waqf for acquisition of a property by a Mutawalli in the name of his wife would amount to a breach of trust and the property so acquired would be treated as waqf property. [905 E G] Moattar Raza and Ors. vs Joint Director of Consolidation U.P., Camp at Bareilly and Ors., A.1,R. 1970 All. 509 explained. Mohammad Qamer Shah Khan vs Mahammed Salamat Ali Khan A.I.R. 1933, All. 407 over ruled. The law as regards distribution of distributable income of the waqf property amongst the beneficiaries is that the benefit of a waqf for a person 's "sons and his children, and the children of his children for ever so long as there are descendants, is taken per capita, males and females taking equally and the children of daughters being included." [896 C F] Ahmed G. H. Ariff and Ors. vs Commissioner of Wealth Tax, Calcutta, ; ; explained and held inapplicable. In the eye of law, according to the concept of Mohammedan law, there was no legal entity available in whose name the property could be acquired except the Mutawalli or the beneficiary. Unlike Hindu law, no property could be acquired in the name of God. Nor could it be acquired in the name of any religious institution like the waqf estate. Necessarily the property bad to be taken in the name of one of the living persons. Ordinarily and generally the acquisition of property out of the waqf funds should have been in the name of the Mutawalli. But it did not cease to be a waqf property merely because it was acquired in the name of one of the beneficiaries. [901 E G] 5. (a) The burden of proof that a particular sale is benami and the apparent purchaser is not the real owner always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. [910 A B] (b) The law relating to benami transactions strictly speaking, cannot, be applied in all its aspects to a transaction of such a kind. Even if applied there will be no escape from the position that the real owner of the property was the Raja in the instant case in his capacity as Mutawalli and the appellant was a mere benamidar. The property in reality, therefore belong to the waqf estate as concurrently and rightly field by the two Courts below. [901 G H, 902 A] Gopeekrist Gosain and Gangaparsaud Gosain, 6 Moore 's Indian Appeals, 53. Bilas Kunwar and Desraj Ranjit Singh and Ors., 42 Indian Appeals, 202, Kerwick and Kerwick, 47 Indian Appeals, 275, Sura Lakshmiah Chetty and Ors. vs Kothandarama Pillai 52 Indian Appeals, 286 Mt. Sardar Jahan and Ors. vs Mt. Afzal Begam, A.I.R. 1941, Oudh, 288, Mt. Siddique Begam vs Abdul Jabbar Khan and Ors. , A.I.R. 1942, Allahabad, 308, Kalwa Devadattam and two Ors. vs The Union of India and Ors, ; Union of India vs Moksh Builders and Financiers Ltd. and Ors., ; Kana karathanammal vs V. section Loganatha Mudaliar and Anr. ; , Jaydayal Poddar (deceased) through 1. rs. and Anr. vs Mst. Bibi Hazra and Ors., and Krishnanand vs The State of Madhya Pradesh, [1977] 1 S.C.C. 816 referred to. In the instant case (a) It is not possible to decree the appeal in face of her three varying stands in the three Courts viz. (1) in the Trial Court case of acquisition of property with her personal money; (2) in the High Court acquisition of property with the personal money of her husband and (3) in this Court the waqf fund invested from time to time became her personal money and enabled her to acquire the property. [912 B C] 888 (b) A valid waqf was created by Smt. Sughra Begum. Except a Portion of money which was to be spent for public, religious or charitable objects the waqf was primarily of a private nature for the benefit of the settler 's family and their descendants, which is called waqf alal aulad. The ultimate object was to spend income, if any, in the service of the Almighty God. [894 C] Abdul Fata Mohammad vs Rasamaya, 22 Indian Appeals 76 referred to. (c) The evidence is overwhelming on the question as to what was the source of money for the acquisition of the disputed property, either the land and Kothi. It came from the waqf fund. [897 C] (d) Though the Raja was vested with the power to fix stipends for his children and their descendants and for his wives during his life time also, he was not conferred an absolute power or discretion to fix any stipend for any beneficiary and no stipend for some beneficiary. Equality amongst all is a golden thread which runs throughout the Mohammadan law. It is a chief trait of that law. [900 G] (e) Clause 19 of the last will of the Raja cannot create a title in favour of the plaintiff and finish the right of the waqf to the property. If the property became the acquired property of the waqf, a Mutawalli; as the Raja was, by his own declaration contained in clause 19 of the Will could not make it a property of the plaintiff appellant. The recital of fact could be pressed into service only to lend additional support to the plaintiff 's case if she would have stuck to that case and proved it by evidence aliunde. [905 A B] (f) The concurrent findings of the Courts below that the appellant was benamidar on behalf of the waqf does not suffer from any infirmity to justify this court 's interference with the said finding. The burden has been discharged by the respondent so much so that the finding as recorded could not be assailed. It was merely attempted to be availed of to support a new case in this Court. It should be remembered that 'by far the most important test for determining whether the sale standing in the name of one person is in reality for the benefit of another ' namely the source whence the purchase money came has been established beyond doubt. The nature and possession of the property after the acquisition was such that it did not lead to the conclusion that it was not a waqf property and was a property in exclusive possession of the appellant through her tenants including the respondent. [910 H, 911 A B] (g) In a case of this nature, all the aspects of the benami law including the question of burden of proof cannot justifiably be applied fully. Once it is found, as it has been consistently found, that the property was acquired with the money of the waqf, a presumption would arise that the property is a waqf property irrespective of the fact as to in whose name it was acquired. The Mutawalli by transgressing the limits of his power and showing undue favour to one of the beneficiaries in disregard to a large number of other beneficiaries could not be and should not be permitted to gain advantage by this method for one beneficiary which in substance would be gaining advantage for himself. In such a situation it will not be unreasonable to say rather it would be quite legitimate to infer, that it was for the plaintiff to establish that the property acquired was her personal property and not the property of the waqf. [911 G H, 912 A B]

Appeal No. 690 of 1976. Appeal from the Judgment and Order dated the 16th December, 1975 the Gujarat High Court in Special Civil Appln. No. 571/75. G.S. Sanghi and Girish Chandra for the Appellants. V.M. Tarkunde, K.L. Hathi and Mrs. P.C. Kapur for Re spondent No. 1. The Judgment of the Court was delivered by GOSWAMI, J. This appeal on certificate is from the judgment of the High Court of Gujarat. The appellants 1 and 2 are respectively the Union of India and the Regional Provident Fund Commissioner. The 1st respondent is Majur Mahajan Mandal (hereinafter to be described as the union), a registered trade union representing the majority of the textile workers of the five textile mills of Baroda (re spondents 2 to 6) who are not represented before us and who will be described hereinafter as the mills, Since some time in 1973, industrial disputes in respect of dearness allowance (D.A.) had been pending between the union and the mills in five references before the Industrial Court, Gujarat, being Reference Nos. 406, 407, 408, 409 and 421 of 1973. The rate of D.A. for the employees in the cotton textile industry in Ahmedabad had earlier been fixed by an award of an industrial Tribunal which will be referred to hereinafter as the Ahmedabad Rate. The prevalent D.A. in 1973 in the mills with which we are concerned was 90% of the Ahmedabad Rate. The union was raising the aforesaid disputes for increasing the D.A. to 100% of the Ahmedabad Rate with effect from October 1, 1972. Hence the above references were pending before the Industrial Court. As a result of negotiations between the parties during the pendency of the said disputes before the Industrial Court D.A. was agreed to be paid at the rate of 95% of the Ahmedabad Rate of D.A. with effect from January 1, 1974, as will appear from an interim award of the Industrial Court dated June 21, 1974. Thereafter by further negotiations the disputes regarding D.A. were finally resolved by the mills and the union entering into a settlement on June 28, 1974, by fixing D.A. at 100% of the Ahmedabad Rate with effect from January 1, 1974. Awards were later made bY the Court in conformity with the said settlement in the pending disputes some time in August and September, 1974. It is not disputed that the workers of the mills in pursuance of the settlement of the disputes received D.A. at 100% of the Ahmedabad Rate retrospectively with effect from 1st January, 1974. It may even be assumed that the arrear D.A. for the past period from January 474 1, 1974, was paid to the workers in August or perhaps. even later, that is to say, after 6th July, 1974, the signifi cance of which date we will immediately see. While the aforesaid disputes were pending before the Industrial Court, The (briefly the Act), replacing the earlier Ordinance on the subject, came into force retrospectively from 6th July, 1974, the appointed day, under the Act. This Act was passed as the preamble says, "to provide, in the interests of national economic development, for the compul sory deposit of additional emoluments and for the framing of a scheme in relation thereto, and for matters connected therewith or incidental thereto". The employees to whom the Act is applicable are classi fied into three categories, namely, employees of the Govern ment, of local authorities and other employees. The principal object of the Ordinance and later of the Act is to control the menacing inflationary trend which has been the bane of the country 's economy. On the one hand there has been persistent demand from employees for revi sion of wages and increase of D.A. on account of the high cost of living and on the other the State has to tackle the national problem of mounting pressure of inflationary forces. While, therefore, meeting with the demands for rise in emoluments, simultaneously, steps with equal force had to be taken so that the additional amounts disbursed do not immediately flow to the market adding a further fillip to inflation. The Ordinance and later the Act thus provide for compulsory deposit for a period of one year of the whole of the additional wages and for a period of three years of half of the additional D.A. The additional emoluments earned are thus impounded under the Act and are not immediately available to the employees for instant consumption. The Act provides a scheme of beneficial forced saving and the deposited amounts will be finally repaid to the employees in different ways specified in the Act with interest at 21/2% over and above the Bank deposit rate. Before we proceed further we may note some of the provi sions of the Act material for our purpose: By section 2(a) of the Act "appointed day" means the 6th day of July, 1974". By section 2(b) " 'additional dearness allowance ' means such clearness allowance as may be sanctioned from time to time, after the appointed day, over and above the amount of dearness allowance payable in accordance with the rate in force immediately before the date from which such sanction of additional dearness allowance is to take effect". * * * * By section 2(e) " 'dearness allowance ' means all cash payments, by whatever name called, made to an employee on account of rise in 475 the cost of living". Under section 2(g) " 'emoluments ' include wages and dearness allowance". Under section 5 every specified authority (herein the employer) shall open two separate accounts, namely, the Additional Wages Deposit Account and the Additional Dearness Allowance Deposit Account. The employer shall open a sepa rate ledger account in the name of each employee. Section 6(2)(b) of the Act enjoins on the employer a duty to make deductions and to remit to the nominated authority addition al wages and additional D.A. from emoluments disbursed after the appointed day. In the case of additional wages it will be the whole amount and in the case of additional D.A. it will be half of it. It is common ground that the Act applies to the mills which are the "employers" under the Act and also "specified au thorities" under the Additional Emoluments Compulsory Depos it (Employees other than employees of Government and Local Authorities) Scheme, 1974, which is made under section 10 of the Act. The union applied to the High Court under Article 226 of the Constitution for a writ of mandamus or other suitable order to permanently restrain the mills from effecting any deduc tion from the arrears of dearness allowance payable to their employees from January to June 1974 on the basis of the settlement of 28th June, 1974. There was a further prayer to permanently restrain the mills from treating the base for calculation of additional D.A. at a rate less than the agreed 100% of the Ahmedabad Rate and to direct the mills not to deduct or deposit 21/2% of D.A. per month payable to each employee treating the same as not being additional D.A. within the meaning of section 2(b) of the Act. Lastly there was a prayer for refund of the amount already deducted by the mills. The High Court allowed the writ application and also granted certificate to appeal to this Court. The appellants contend that 100% of the Ahmedabad Rate of D.A. to the workers was sanctioned after the appointed day, that is to say after 6th July, 1974, when the awards were made between August and September 1974 in pursuance of the settlement of June 28, 1974. The claim of the appellants is two fold: First, since the increased D.A. to the work ers was sanctioned after the appointed day, only when the awards were made, the difference between the increased D.A. at 100% of the Ahmedabad Rate and the prevailing rate pay able in arrears from 1st January, 1974 to 30th June, 1974, will be additional D.A. in terms of section 2(b) of the Act and is, therefore, subject to deduction of 50% of the same. Second, for future deductions of additional D.A., after the appointed day, the base for calculation of additional D.A. should be 95% of the Ahmedabad Rate of D.A. which was pre vailing prior to 6th July, 1974, in terms of the interim award of 21st June, 1974. In other words, for future deductions of additional D.A. after 6th July, 1974 the appellants claim that the workers should be treated as if they were in receipt of D.A., prior to the appointed day, at 95% of the Ahmedabad Rate which had been in force in terms of the interim award of 21st June, 1974, which is the earli er sanction for the 95% rate. Hence, 2 1/2% (that is 50% of 5% being the difference between 95% and 100%) of the same will be liable for deduction under the Act from 6th July, 1974. According to the appellants, the benefit of 100% was available only after the making of the awards which was, thus, sanctioned after 476 the appointed day notwithstanding the fact that the settle ment had been entered upon on 28th June, 1974. Section 2(b) will, therefore, be clearly attracted, according to the appellants. It is submitted by the appellants that the word "sanc tioned" in the definition of 'additional dearness allowance ' under section 2(b) is very significant. It is contended that the settlement during the pendency of an industrial dispute before the industrial Court has to be approved by the Court before it can be said to be sanctioned within the meaning of the provisions of section 2(b). Reference is made to section 115A of the Bombay Industrial Relations Act, 1946. That section, so far as it is material for our pur pose, provides that if any agreement is arrived at between an employer and the union which are parties to an industrial dispute pending before an Industrial Court the award in such proceeding shall be made in terms of such agreement unless the Industrial Court is satisfied that the agreement was in contravention of any of the provisions of the Act or the consent of either party to the agreement was caused by mistake, misrepresentation, fraud, undue influence, coercion or threat. Relying on section 115A, it is submitted by the appellants, that unless the award is made in pursuance of the settlement under the said section the settlement is inchoate and cannot be said to be effective, in law, prior to the making of the award which was done, in the instant case, between August and September 1974. It is, therefore, submitted that the additional D.A. can be said to be sanc tioned only under the award which was made admittedly after the appointed day, that is after July 6, 1974. We are unable to accept this contention. It is true that an agreement arrived at between the parties during the pendency of an industrial dispute before the Industrial Court has to be placed before that Court. It is also true that if the Industrial Court is satisfied that certain conditions enumerated in section 115A exist it will not recognise the settlement and dispose of the dispute in accordance with law. If, however, the conditions enumerated in section 115A do not exist the award "shall be made" in terms of the settlement. There is No. other option. In this particular case the settlement was placed before the Industrial Court which ultimately passed the awards in conformity with the terms of the settlement. We are not required to consider a case where the Industrial Court has not approved of the settlement under section 115A. Once, therefore, the award is made in terms of the settlement, under section 75 of the Bombay Industrial Rela tions Act, the award shall come into operation on the date specified in the award or where no such date is specified therein on the date on which it is published under section 74. We are informed that the awards have not yet been published but that should not detain us in this case. It is common ground that the awards were in terms of the settle ment which had retrospective operation from January 1, 1974. Since the settlement has merged in the awards the terms of the awards are those specified in the settlement. It is those dates which 477 are, therefore, specified in the awards and, under section 75 of the Bombay Industrial Relations Act, the awards came into operation with effect from January 1, 1974. The sanc tion of the awards in such a case is the sanction under the settlement and since the settlement was prior to July 6, 1974, the additional D.A. cannot be said to be sanctioned after the appointed day. 100% of the Ahmedabad Rate of D.A. will be payable to the workers with effect from January 1, 1974 and the sanction for that rise was on 28th June, 1974, the date of the settlement which was prior to the appointed day. Sanction must have relevance to the reality of the transaction between the parties. The settlement of 28th June, 1974, makes the increased D.A. of 100% payable with effect from January 1, 1974. Hence the said rate of in creased D.A. which was payable to the workers between Janu ary 1, 1974 and July 5, 1974, was sanctioned prior to the appointed day. We have already noted the definition of additional D.A. in section 2(b) which is an integrated definition. The definition clause has twin components both of which will have to be satisfied in order that a particular amount can be held to. be additional D.A. To put it clearly the two components are ( 1 ) additional D.A. is that part of the D.A. which is sanctioned after the appointed day; and (2) which is over and above what was payable immediately before the date from which sanction of the particular rise in D.A. is to take effect. With regard to the first component any unilateral deci sion to increase the D.A. or a bilateral settlement for its increase, to take only two instances, must take place after the appointed day. It is manifest that if the sanction is after the appointed day it is then only the question of additional D.A. will arise within the meaning of section 2(b). Once it is found that the sanction of rise in DA. is prior to the appointed day, section 2(b) will not at all be attracted. In that event it will not be necessary even to. consider the second component of the definition mentioned above. In the instant case we have already held that the rise in D.A. to 100% of the Ahmedabad Rate of D.A. was sanctioned under the settle ment of 28th June, 1974, that is, before the appointed day. One of the principal components of the definition clause is, therefore, clearly absent in this case since there is no sanction for any rise in D.A. after the appointed day. We should observe that this is not a case where Explana tion I to section 2(b) is applicable. Mr. Singhvi for the appellants submits that in view of the aim and object of the Act the Court should lean in favour of an interpretation advancing the remedy by constru ing the word "sanctioned" in section 2(b) to .mean sanc tioned by the award and not by the settlement. We have already given our reasons for our inability to accept this submission. One other reason may be added. 478 The Act recognises agreements and settlements in the same way as awards of Tribunals, vide, section 2(c). The definition of "additional wages" under section 2(c) clearly points to that. Any wage revision "whether by or under an agreement or settlement between the parties or any award . "comes within the sweep of the aforesaid defi nition clause. Agreements and settlements are separately and distinctly mentioned along with awards. Settlement is a type of sanction recognised under the Act. There is, there fore, sufficient warrant under the Act to give effect to the sanction by voluntary settlement in respect of D.A. when the same has never been repudiated by any of the concerned parties. When there is no ambiguity in the word "sanctioned" in section 2(b), recourse to the aim and object of the Act is not even called for in this case. Both the contentions of the appellants, therefore, fail on the solitary. ground, namely, that the particular sanc tion of additional D.A. in this case is not after the ap pointed day. The appeal is dismissed with costs. P.B .R. Appeal dismissed.

Section 2(b) of the defines additional dearness allowance to mean such dearness allowance as may be sanctioned from time to time after the appointed day, i.e., July 6, 1974 over and above the amount of dearness allowance payable in accordance with the rate in force immediately before the date from which such sanction of additional dearness allowance is to take effect. Section 6(2) (b) enjoins on the employer the duty to make deductions and to remit to the nominated au thority additional dearness allowance from the emoluments disbursed after the appointed day. Section 115A of the Bombay Industrial Relations Act, 1946 provides that if any agreement is arrived at between the employer and employees who are parties to an industrial dispute pending before the industrial court, the award in such proceeding shall be made in terms of such agreement, except in certain circumstances stated therein. As a result of negotiations between the employers and employees a settlement was entered into between the parties on June 28, 1974 enhancing the dearness allowance with retrospective effect from January 1, 1974. The Indus trial Court before which certain disputes were pending gave the award conformity with the settlement sometime in August September, 1974. Arrears of dearness allowance were paid after the appointed day. In a petition under Article 226 of the Constitution by the employees ' Union, the High Court issued a writ re straining the employers from effecting any deduction from the arrears of D.A. payable to the employees on the basis of the settlement and granted certain other reliefs. In appeal it was contended that since the settlement of June 28, 1974 could not be effective prior to the award made in August September 1974 additional dearness allow ance could be said to be sanctioned only after the award and so the provisions of section 2(b) would be attracted. Dismissing the appeal HELD: One of the components of cl. 2(b) namely, that the additional dearness allowance is that part of the D.A. which is sanctioned after the appointed day, is absent since there was no sanction for any rise in dearness allowance after the appointed day. [477 G] (1) According to section 115A of the Bombay Industrial Rela tions Act if the conditions enumerated therein did not exist the award "shall be made" in terms of the settle ment. Since the settlement in this case had merged in the award, the terms of the award are those specified in the settlement. The sanction of the award in such a case was the sanction under the settlement and since the settlement was prior to the appointed day, additional dearness allow ance could not be said to be sanctioned after the appoint ed day. [476 F & H] In the instant case the Industrial Court having passed the award in conformity with the terms of the settlement, the award came into operation on the date specified in it. (2) Sanction must have relevance to the reality of the transaction between the parties. Increased dearness allowance payable between January 1, 1974 and July 5, 1974 was sanctioned prior t.o the appointed day. Once it is found that the sanction was prior to the appointed day, section 2(b) would not be attracted. [4 (3) From the definition of "additional wages" in section 2(c) it is clear that the Act recognises agreements and settle ments in the same way as awards of Tribunals. Any wage revision "whether by or under an agreement or settlement between the parties or any award" comes within the sweep of the definition clause. Agreements and settlements are distinctly mentioned along with awards. Settlement is a type of sanction recognised under the Act. There is there fore sufficient warrant under the Act to give effect to the sanction by voluntary settlement in respect of D.A. When there is no ambiguity in the word "sanctioned" in section 2(b) recourse to the aim and object of the Act is not called for. [478 A B]

Appeal Nos. 2919 20 of 1981. From the Judgment and Order dated 15.9.1981 of the Calcutta High Court in Civil Rule No.3567 (W) of 1981. section Murlidhar, Rathin Das and R.F. Nariman for the Appellant. S.S. Ray, S.M. Jain, A.P. Dhamija, Sudhanshu Atreya, B.K. Jain, S.K., Jain and P.K. Mukherjee for the Respondents. The Judgment of the Court was delivered by KASLIWAL, J. Both the above appeals by grant of special leave are directed against the common order of the High Court dated 15.9.1981 as such the same are disposed of by one single order. The respondent Messrs Singel Tea and Agricultural Industries Limited, a private limited company incorporated under the (in short 'The Company ') filed a writ petition under Article 226 of the Constitution in the High Court on 22.4.1981 challenging the order dated 16.4.1981 issued by the Collector, Darjeeling whereby possession of the tea garden known as M/s. Singell Tea Estate were taken over with effect from 16.4.1981. In view of the fact that the West Bengal Tea Development Corporation Limited, a Government Company (in short 'The Corporation ') had been handed over the possession of the tea garden on 21.4.1981; the said Corporation was also impleaded as a party respondent. The State of West Bengal enacted The West Bengal Estates Acquisi 882 tion Act, 1953 (hereinafter referred to as 'The Act ') to provide for the State acquisition of estates, of rights of intermediaries therein and of certain rights of raiyats and under raiyats and of the rights of certain other persons in lands comprised in estates. The State Government also issued a notification under Section 4 of the Act vesting all estates and rights of every intermediary in the State free from all encumbrances. This notification also covered the land comprised in the tea garden know as M/s. Singell Tea Estate. The Revenue Officer, Kurseong, Darjeeling issued notices to the Company initiating proceedings for assessment of rent of the said tea garden. The Company appeared in the said proceedings and contended that it was not an intermediary within the meaning of the Act and the provisions of the Act were not applicable to the said tea garden as the same was a freehold land and the Revenue Officer had not jurisdiction to assess the rent under Section 42(2) of the Act. The Revenue Officer rejected the contentions of the Company and passed two orders fixing the rent at Rs.2,375.94 per year. The Government being not satisfied with the quantum of rent determined by the Revenue Officer took further proceedings for the revision of the entries in the record of rights in respect of the tea garden and in those proceedings the Revenue Officer by order dated 22.8.1968 redetermined the rent at Rs.8,769.24 per year. The Company aggrieved against the aforesaid order of the Revenue Officer preferred two appeals before the District Judge, Darjeeling acting as Tribunal under sub section (3) of Section 44 of the Act. Both the appeals were dismissed in default. The company filed two applications for restora tion of the appeals under Order 41 Rule 19 of the Code of Civil Procedure, but both the applications were dismissed by the Learned District Judge by his order dated 16.8.1975. The Company then filed two applications under Section 115 of the Code of Civil Procedure read with Article 227 of the Constitution in the High Court challenging the aforesaid orders of the District Judge dated 16.8.1975. A Division Bench of the High Court by its order dated 1.10.1975 granted interim stay of the operation of the order of the Revenue Officer dated 22.8.1968. During the pendency of the aforesaid cases in the High Court, the Additional Deputy Commissioner of Darjeeling by his letter dated 20.6.1979 informed the Manager of Singell Tea Estate that inspite of repeated reminders, the Company had not executed the long term lease for 30 years on prepayment of the requisite number of instalments of rent and cesses. 883 The above mentioned letter of the Additional Deputy Commissioner, Darjeeling was received by the Company on 8.&1979 and was replied by the Solicitor of the Company by letter dated 13.8.1979. In the reply, it was pointed out that the High Court had granted the stay order and as such requested the Additional Deputy Commissioner to stay his hands till the disposal of the said cases. Thereafter, the Collector of Darjeeling served upon the Company a notice under Section 106 of the determining the tenancy of the Company in respect of the tea garden on the expiry of 14.4.1981. The Company was requested to hand over vacant and peaceful possession of the tea garden to the Junior Land Reforms Officer or the Sub Divisional Land Reforms Officer of the area or the Executive Magistrate immediately on the expiry of 14.4.1981, failing which it was directed that the Company would be deemed a trespasser and would also be liable to pay mesne profits till the Company was evicted in due course of law. The above notice was received by the Company on 15.11.1980. In reply to the said notice under Section 106 of the , the Solicitor of the Company replied by letter dated 15.12.1980 agains pointing out the issuance of the stay orders by the High Court and requested the Collector of Darjeeling to stay his hands until further order from the High Court. Thereafter, the Collector, Darjeeling issued the order dated 16.4.1981 which reads as under: "To : The Proprietor, M/s. Singella Tea Estate, P.O. Kurseong, District : Darjeeling. I do hereby take over the possession of your tea garden known as Singel Tea Estate with effect from 16th April, 1981 as you have failed to execute Long Term Lease/Summary Lease, by paying the government dues by 14th April 1981 as required in the notice served upon you section 106 of . Sd/ Illegible Collector, Darjeeling. " According to the Company, by the impugned order the Collector intimated the Company that he would take possession of the estate. But the language of the order shows as if the Collector had taken possession of the tea estate on 16.4.1981 and he recorded the fact of taking possession 884 of the tea garden in the said order. According to the Company, the said order did not mention as to how and in what manner the possession of the tea garden was taken by the Collector. The stand of the State Government in this regard was that possession of the tea garden was taken by the Collector on 16.4.1981, as stated in the order. The further case of the Government was that the possession of the tea garden was handed over to the Corporation on 21.4.1981. As already stated above, the Corporation was subsequently added as a party and an affidavit was filed by Shri Aninda Mohan Bose, the Managing Director of the Corporation stating therein that possession of the tea garden was taken by one Shri R.B. Subba, Circle Inspector (Land Reforms) Kurseong, L.R. Circle on behalf of the Government on 21.4.1981 and handed over to the Corporation. The High Court from the above circumstances concluded that the statement made by the Collector in the impugned order dated 16.4.1981 about his taking over the possession of the tea garden on that date was incorrect. The High Court, however, observed that it was not disputed that tea garden was now in the possession of the West Bengal Tea Development Corporation Limited since 21.4.1981. The High Court examined the question whether the tenancy of the Company in respect of the tea garden could be terminated and the possession of the same could be taken over by the Government. The High Court in the circumstances mentioned above held that the Collector of Darjeeling was fully aware of the stay order dated 1.10.1975 passed by tile High Court against the order of the Revenue Officer dated 22.8.1968 fixing the rent at Rs.8,769.24 per year before issuing the notice under Section 106 of the as well as on the date of issuing the impugned order dated 16.4.1981. According to the High Court, there was no question of granting a lease so long as the rent was not determined under Section 42 (2) of the Act. As the order fixing the rent was stayed by the High Court, the question of granting on execution of the lease by the Company could not arise. Thus, the action of the Collector in taking possession of the tea garden by the impugned order dated 16.4.1981 on the ground that the Company had failed to execute a long terms lease or summary lease by paying the Government dues by 14.4.1981 as required in the notice given under Section 106 of the , was not correct. The High Court further held that the Collector did not make any order of summary settlement as required by paragraph 1 of Schedule F of The West Bengal Estates Acquisition Rules, 1954. Thus, the Collector failed to 885 perform his statutory duty by not granting a summary settlement specifying the terms and conditions of the tenancy and violated the provisions of the Rules. As regards the contention on behalf of the State Government that the Company should have paid at least the rent at the rate of Rs.2,375.94 per year initially determined by the Revenue Officer under Section 42 (2) of the Act, the High Court rejected the same on the ground that the Government had not accepted the same and had not made any demand for payment of rent at that rate. The High Court took the view that the rent was fixed for the second time by order dated 22.8.1968 but the demand for payment of rent was made after a long time in 1979 and obviously such demand would be for the enhanced rent as fixed for the second time and the same having been stayed by the High Court, it was doubtful whether the tenancy could be terminated and possession could be recovered on the ground of non payment of rent. The High Court, as such, held that the Collector had taken the law into his own hands and took over possession otherwise than in accordance with law and such action on the part of the responsible officer like the Collector cannot be approved. As a result of the above findings, the High Court allowed the writ petition and issued a writ of mandamus commanding the State Government and other authorities to deliver the possession of the tea garden to the Company within a month from the date of the order. Both the State of West Bengal as well as the Corporation have come in appeal challenging the order of the High Court. We have heard learned counsel for the parties and have persued the record. The two revisions filed under Section 115 of the Code of Civil Procedure read with Article 227 of the Constitution challenging the two orders passed by the District Judge dismissing the two applications filed under Order 41 Rule 19 of the Code of Civil Procedure for restoration of the two appeals filed against the determination of the rent for the second time at the rate of Rs.8,769.24 per year are still pending before the Calcutta High Court. This Court on 13.12.1991 had passed the following order: "The Calcutta High Court is requested to dispose of finally within the three months from today Civil Rule Nos.3741 42 of 1975. These appeals to be on board on 7th April, 1992. The. order communicated to the Calcutta High Court forthwith." 886 However, inspite of the above order, we were informed by the learned counsel for the parties that the Civil Rule Nos.3741 42 of 1975 have not been disposed of by the High Court. As the above mentioned two appeals directed against the order of the High Court dated 15.9.1981 are pending in this Court for the last more than 11 years, we do not consider it proper to further wait for the decision of the Civil Rule Nos.3741 42 of 1975 pending in the High Court and we propose to decide these appeals. The West Bengal Estates Acquisition Act, 1953 abolished the intermediaries and upon the due publication of a notification under Section 4 of the Act, the estates and the rights of intermediaries in the estates vested in the State free from all intermediaries under Section 5 of the Act. Section 6 provides for retaining certain lands by the intermediaries. Section 42 provides for retaining possession of any land subject to the liability to pay rent as determined by the Revenue Officer. Sub section (2) of Section 42 provides that when an intermediary is entitled to retain possession of any land comprised in a tea garden under Clause (f) of sub section (1) as read with sub section (3) of Section 6 of the Act, the Revenue Officer shall determine the rent payable in respect of such land in the manner provided in the said sub section. In the present case, the Revenue Officer had initially determined the rent at the rate of Rs.2,375.94 per year and on the representation of the State Government the same was refixed at Rs.8,769.24 per year. So far as the Company is concerned, it had taken a clear stand before the Revenue Officer that it was not an intermediary nor the provisions of the Act applied in the case as the land was claimed as freehold. The admitted facts of the case are that the Revenue Officer had initially determined the rent at the rate of Rs.2,375.94 per year, but the same was not accepted by the Government and on a representation made by the State Government, the Revenue Officer had refixed the rent at Rs.8,769.24 per year by order dated 22.8.1968. The Company had challenged the rent refixed at Rs.8,769.24 and the High Court in Civil Rule Nos. 3741 42 of 1975 had stayed the order of the Revenue Officer dated 22.8.1968 fixing the rent at the rate of Rs.8,769.24 in view these circumstances, it was necessary on the part of the Collector to have passed an order of summary settlement as contemplated under Form I Schedule F of The West Bengal Estates Acquisition Rules, 1954. The High Court in these circumstances was right in holding that the Collector had no jurisdiction 887 to terminate the tenancy on the ground of non payment of rent or for not executing a lease deed inasmuch as the Collector had not mentioned in the notice terminating the tenancy under Section 106 of the that he was prepared to accept the rent at the rate of Rs.2,375.94 per year as determined initially by the Revenue Officer. We agree with the reasoning and conclusion arrived at by the High Court. Now, taking in the view the entire facts and circumstances of the case and in order to do complete justice between the parties, we deem it proper that the respondent Company should be given the possession of the tea garden provided the Company pays the entire areas of rent from 27.7.1965 to 21.4.1981, the date when the Company was dispossessed calculated at the rate of Rs.8,769.24 per year after adjusting any amount already paid within three months from today. There would be no necessity for the Collector to make any order of summary settlement and a long term lease shall be executed as contemplated under sub section (3) of Section 6 of the Act. As soon as the arrears of rent as mentioned above are paid by the Company, and a lease deed is executed, the Company shall be handed over the possession of the tea garden. In case, any increase in the amount of rent is permissible under the law due to lapse of time, the State Government would be free to take the same into consideration while granting the long term lease. The learned counsel appearing for the respondent Company had not objected for determining the arrears of the rent at the rate of Rs.8,769.24 per year, to put an end of this litigation. These appeals are disposed of in the manner indicated above. In the facts and circumstances of the case, we make no order as to costs. G.N. Appeals disposed of.

The appellant State issued a notification under section 4 of the West Bengal Estates Acquisition Act, 1953 covering the land comprised in the tea garden of the respondent company. The Revenue Officer issued notices to the respondent company initiating proceedings for assessment of rent. The Company objected stating that it was not an intermediary within the meaning of the Act and since its tea estate comprised of free hold land the Revenue Officer had no jurisdiction to assess the rent under Section 42(2) of the Act. The Revenue Officer rejected the contention and fixed the rent at Rs.2,375.94 per year. On revision preferred by the State, the Revenue Officer determined the rent at Rs.8,765.24 per year. The Company preferred appeals before the Tribunal. The appeals were dismissed in default and the restoration applications were also rejected. Thereafter, the Company preferred applications before the High Court under Section 115 CPC read with Article 227 of the Constitution for restoration of the two appeals, and obtained stay of the operation of the Revenue Officer 's order. During the pendency of the cases, the Additional Deputy Commissioner informed the respondent that inspite of the repeated reminders the company had not executed the long term lease for 30 years on prepayment of the requisite number of instalments or rent and cess. The respondent company replied pointing out that the High Court had granted the stay order and therefore the matter stood stayed till the disposal of the said cases. Thereafter, the Collector served upon the Company, a notice under section 106 of the Transfer of Property Act, 880 1882 determining the tenancy of the company In respect of the tea garden on the expiry of the specified date. The company was required to hand over the vacant and peaceful possession of the tea garden. In reply to the said notice, the company stated that in view of the stay order granted by the High Court no further proceedings be taken. Thereafter the Collector took over the possession of the tea garden. The applications before the High Court were still pending. However, aggrieved by the order of the Collector taking over its tea garden, the Respondent preferred a Writ Petition before the High Court Allowing the writ petition, the High Court directed the appellant State Government and other authorities to deliver the possession of the tea garden to the Company within a month. Aggrieved by the High Court 's order, the State as also the West Bengal Tea Development Corporation to whom the possession of the tea garden is transferred by the State, preferred appeals, before this Court. Disposing of the appeals, this Court, HELD:1. The Revenue Officer had initially determined the rent at the rate of Rs.2,371.94 per year, but the same was not accepted by the Government and on a representation made by the State Government, the Revenue Officer had refixed the rent at Rs.8,769.24 per year by order dated 22.8.1968. The Company had challenged the rent refixed at Rs. 8.769.24 and the High Court had stayed the order of the Revenue Officer fixing the rent at the rate of Rs.8,769.24. In view of these circumstances, it was necessary on the part of the Collector to have passed an order of summary settlement as contemplated under Form I Schedule F of the West Bengal Estates Acquisition Rules, 1954. The High Court was, therefore, right in holding that the Collector had no jurisdiction to terminate the tenancy on the ground of non payment of rent for not executing a lease deed inasmuch as the Collector had not mentioned in the notice terminating the tenancy under Section 106 of the Transfer of Property Act, that he was prepared to accept the rent at the rate of Rs. 2,375.94 per year as determined initially by the Revenue Officer. [886 F H; 887 A,B] 2.In order to do complete justice between the parties, it is proper that the respondent Company should be given the prosession of the tea garden provided the Company pays the entire arrears of rent from 27.7.1965to 21.4.1981, the date when the Company was dispossessed, 881 calculated at the rate of Rs. 8,769.24 per year after adjusting any amount already paid, within three months. There would be no necessity for the Collector to make any order of summary settlement and a long term lease should be executed as contemplated under sub section (3) of Section 6 of the West Bengal Estates Acquisition Act, 1953. As soon as the arrears of rent are paid by the Company and a lease deed is executed, the Company should be handed over the possession of the tea garden. In case any increase in the amount of rent is permissible under the law due to lapse of time, the State Government would be free to take the same into consideration while granting the long term lease. [887 B D]